Despite a steep rise in non-tax provisions, Punjab National Bank (PNB) on Friday said its second quarter net profit rose 31.31 per cent to Rs 707.09 crore, compared with Rs 538.48 crore during the July-September quarter of the previous financial year.
The bank’s total income went up by 35.16 per cent to Rs 5,313.18 crore during the quarter ended September 2008. Interest income rose by 34.28 per cent to Rs 4,650.40 crore during the second quarter this year, as against Rs 3,463.07 crore in the same period last year.
During the quarter, PNB improved its net interest margin (NIM), which is the difference between interest earned and interest payments, to 3.78 per cent, as against 3.48 per cent during the quarter ended September 2007, PNB Chairman & Managing Director K C Chakrabarty said at a press conference. He said that the target was to maintain NIM at these levels during the remaining quarters.
The public sector bank’s non-tax provisions were over four times higher at Rs 317.74 crore, as against Rs 77.86 crore during the second quarter last year. The higher provisions were on account of the farm loan relief scheme and other non-performing assets (NPAs), Chakrabarty said.
The bank’s net NPAs, as a percentage of assets, fell to 0.42 per cent at the end September 2008, as against 1.86 per cent at the end of the second quarter last year. Total net NPAs were estimated at Rs 544.73 crore at the end of September 2008, compared with Rs 1,868.26 crore.
For the six-month period ended September 2008, PNB reported a 27 per cent rise in net profit at Rs 1,219.50 crore, compared with Rs 963.55 crore during July-September last year. Total income rose 28 per cent to Rs 9,907.80 crore during the first half of the current financial year.
The bank has been able to deploy credit as per its objectives and comply with regulations as it was not constrained by liquidity concerns, Chakrabarty said. The bank’s shares closed 4.50 per cent higher at Rs 420 on the Bombay Stock Exchange.
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