PNB Q1 net profit edges up to Rs 1,105 cr

The country's second largeststate-run lender Punjab National Bank on Thursday posted a marginal 3.4 percent rise in net profit to Rs 1,105 crore for the first quarter on account ofhigher provisioning against bad debts and decline in treasury income.

The bank had a net profit of Rs 1,068 crore during theApril-June quarter of the previous fiscal.

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Total income during the first quarter, however, grew by 36.9per cent at Rs 9,399 crore against Rs 6,863 crore in the same period during2010-11.

The net profit has been impacted due to higher provisioning,decline in treasury income during the quarter, PNB Chairman and ManagingDirector K R Kamath said.

However, the operating profit of the bank during the quarterrose by 18 per cent to Rs 2,474 crore as compared to Rs 2,098 crore in the samequarter a year ago, he said.

During the quarter, the bank made total provision of Rs1,368 crore. Of this, Rs 566 crore was toward bad debts and Rs 475 crore wastoward income tax.

At the same time, the net interest income of the bank grewby 20 per cent at Rs 3155 crore during the quarter.

On revision of interest rates, Kamath said, "There isupward bias on the rates. The bank will decide on the hike tomorrow".

Earlier this week, the RBI raised the key policy rates by ahefty 50 basis points making cost of fund expensive.

Total business crossed Rs 5.67 lakh crore at the end of thequarter, he said, adding, this is higher by 25.4 per cent.

During the year, the bank's net interest margin declined to3.84 per cent from 3.91 per cent at the end of June, 2010.

On the margin outlook for the current fiscal, Kamath said,"We will try to hold the net interest margin at 3.5 per cent during theyear".

Capital adequacy of the bank as at the end of June as perthe Basel-II norms was 12.42 per cent at the end of June, 2011.

Significantly, the gross non-performance asset (NPA) as aproportion of advances went up to 2 per cent against 1.82 per cent at the endof June last year. Net NPA also rose to 0.86 per cent during the year from 0.66per cent.