Punjab National Bank reported a 5.5 per cent increase in net profit for the quarter ended December 31, 2011, at Rs 1,150 crore (Rs 1,090 crore) on Tuesday. This is despite a sharp rise in cost of funds coupled with higher marked-to-market provisioning in G-secs, which pulled down third quarter profit growth.
The bank's bottomline performance was lower than the net profit of Rs 1,205 crore recorded in second quarter this fiscal. For the nine-month period ended December 2011, PNB reported a 7 per cent increase in net profit at Rs 3,460 crore (Rs 3,233 crore). It recorded a net profit of Rs 4,433 crore in fiscal 2010-11.
Going by the current trend in bottomline performance, the bank should comfortably surpass the profit level of last fiscal, Mr K.R Kamath, Chairman and Managing Director, PNB, told reporters after a Board meeting here.
PNB's third quarter financial performance was mainly weighed down by sharp increase in interest expenses, which went up by about 51 per cent, Ms Usha Ananthasubramanian, Executive Director, said.
Interest income grew 33 per cent in the third quarter. The treasury trading profit remained flat at Rs 87 crore.
Of the total provision of Rs 1,526 crore (Rs 1,260 crore), Rs 579 crore (Rs 555 crore) related to non-performing assets. Also, included is depreciation on investment of Rs 143 crore (Rs 44 crore) and provision for standard restructured advances amounting to Rs 167 crore (Rs 109 crore).
Income tax provision for the quarter stood at Rs 580 crore (Rs 546 crore).
KINGFISHER AIRLINES
PNB has categorised debt-laden Kingfisher Airlines as a non-performing asset. It provided about Rs 435 crore for this account in the quarter under review, it is learnt. PNB has both fund-based and non-fund based exposure to this airline, informed sources said.
PNB's net interest margin for the quarter ended December 2011 stood at 3.88 per cent, lower than 4.13 per cent in the same quarter last year. It was 3.95 per cent in second quarter this fiscal.
While cost of deposits grew to 6.74 per cent from 5.20 per cent last year, cost of funds were up 5.76 per cent (4.54 per cent).
Mr Kamath said PNB's acquisition of 30 per cent stake in Metlife India was awaiting the nod of the insurance regulator. The bank is already working as a corporate agency for Metlife and sold its insurance products worth Rs 200 crore in last few months, he said. PNB has stopped distributing LIC products.