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PNB H-1 net profit zooms 33.3% to 735.22 cr

New Delhi, October 29, 2004

Sh. S.S. Kohli, Chairman & Managing Director of the Punjab National Bank disclosed that that as per reviewed half yearly results, the Net profit of the bank amounted to Rs 735.22 crore at the end of September 2004 as compared to Rs 551.52 crore in the corresponding period last year, registering a year-on-year growth of 33.3%.

Operating Profit for the half year ended September 2004 was Rs 1635.74 crore compared to Rs 1709.75 crore in the corresponding period last year. Total Provisions for six months ended September 2004 amounted to Rs 901 crore. For the half year ended Sep 2003, Operating profit included Rs 293 crore on account of profit of buy back of government securities.

The bank as a prudent policy has provided Rs 368 crore for pension & gratuity for the half year ended September 2004.

Bank’s Capital and Reserves at the end of September 2004 increased to Rs 5743 crore compared to Rs 4579 crore in September 2003, registering a growth of 25.4%. Capital to Risk Asset Ratio (CRAR) at the end of September 2004 at 12.58% was higher than 12.55% at the end of September 2003.

Total Business stood at Rs 146459 crore at end September 2004 as compared to Rs 120382 crore at end September 2003, registering a y-o-y growth of 21.7%.

Net interest income of the bank increased by 10.1% on y-o-y basis to reach Rs 1905 crore for the half year ended September 2004 as compared to Rs 1731 crore in September 2003.

Gross income of the bank increased to Rs 5193 crore from Rs 4866 crore, registering a y-o-y growth of 6.7%. Interest expenses increased from Rs 2086 crore in September 2003 to Rs 2238 crore in September 2004, recording a y-o-y growth of 7.3%.

Total deposits of the Bank at the end of September 2004 amounted to Rs 94589 crore as compared to Rs 80185 crore in September 2003, registering a growth of 18% on y-o-y basis. Low cost deposits continued to be the thrust area of the bank and constituted 45.2% of total deposits.

Advances of the bank at the end of September 2004 stood at Rs 51871 crore as compared to Rs 40197 crore in the corresponding period last year, registering a growth of 29% on y-o-y basis.

Mr. Kohli informed that the outstanding retail advances grew by 37% to touch Rs 9915 crore as at the end of September 2004. The major focus of retail lending was on housing and traders’ finance segments. The “Hub & Spokes Model" introduced to facilitate centralized processing of housing loans has been extended to 20 centres.

Under retail loan schemes, the housing loan segment showed an appreciable growth of 37% to reach a level of Rs 4185 crore as at September 30, 2004 from Rs 3053 crore in the same period of last year. Apart from this, the bank continued its focus on other retail segments like traders, education loans, loans to Doctors and lease rentals. Considering the strong competition in this segment, PNB lays emphasis on offering customized solutions to corporates and institutions with due emphasis on providing quality service. Education loans grew by 32% while finance to Traders’ segment showed a 29% growth.

Gross NPAs of the bank declined from Rs 5077 crore in September 2003 to Rs 4155 crore in September 2004. Net NPAs of the bank also declined from Rs 961 crore in September 2003 to Rs 149 crore in September 2004. The Net NPAs as percent to net advances recorded a decline from 2.47% in September 2003 to 0.30% in September 2004. During the current half year reduction in NPAs amounts to Rs 774 crore, as compared to Rs 383 crore last year.

Business per employee of the bank increased from Rs 203.71 lakh at the end of September 2003 to Rs 248.55 lakh at the end of September 2004. The bank has the largest network of branches amongst nationalized banks with 4486 offices including 452 extension counters at the end of September 2004.

Mr. Kohli further added that Priority Sector credit at Rs 24267 crore at the end of September 2004 was 47.71% of net bank credit, much above the national goal of 40%. Lending to agriculture sector amounted to Rs 10770 crore constituting 18.76% of net credit. The Bank has also been felicitated by Govt. Of India for achieving targets under Agriculture lending during the year 2003-04.

Disbursements under agriculture during the half year ended September 2004, amounted to Rs 3615 crore, registering a growth of 107.6% over the corresponding period last year. This has been against the target of Rs 6900 crore for the year 2004-05. Under Kisan Credit Card Scheme, the bank issued 1.61 lakh additional krishi cards during April-September 2004, taking the number of cumulative cards issued to 13.63 lakh. The number of new farmers financed during the current half year stood at 2.26 lakh against the annual target of 2.75 lakh.

Lending to SSI amounted to Rs 5725 crore at the end of September 2004 constituting 11.26% of net credit. As a recognition of bank’s efforts in SSI lending, the bank bagged the National Award for ‘Excellence in SSI Lending’ for the year 2003-04. The Bank has been ranked second continuously for the third year in recognition of its contribution towards lending to SSI Sector.

Total Forex turnover of the bank during the period April-September 2004 increased to Rs 21025 crore as compared to Rs 13327 crore in the same period of previous year, thus showing a growth of 57.8%. In appreciation of excellent support services rendered for the promotion of exports, the bank has received ‘Niryat Bandhu Gold Trophy’ from Federation of Indian Export Organizations (FIEO) for 2002-03, the third year in succession.

Punjab National Bank (PNB) has recently opened a Representative Office at Shanghai (China). PNB’s Shanghai Office will act as single window for providing necessary guidance to business community in China and will go a long way in promoting trade relations between India and China in addition to strengthening correspondent relationship with leading banks in China. PNB has earlier opened a full-fledged branch in Kabul (Afghanistan), the first Indian Bank to open a Branch in that country. The Bank also has representative offices at London (U.K.) and Almaty (Kazakhstan). The bank has decided to upgrade its Rep. Office at Almaty (Kazakhstan) into banking subsidiary for providing complete range of banking facilities. The Bank is in the process of opening representative office in Dubai, UAE.

As part of technological initiative, the bank has captured 99.36% of the total business through computers. The bank has set up 472 ATMs, of which 435 are connected with the switch. The bank has issued a total of 7.80 lac ATM-cum-Debit cards. Besides, the Bank has made available around 2500 ATMs in 205 cities under the MITR facility, an arrangement entered into with four other banks.

Mr. Kohli further added that the Centralized Banking Solutions (CBS), an ambitious project of the bank aimed at interconnectivity of branches, has been implemented in 698 service outlets at over 147 centres to harness the advantages of Anywhere-Anytime banking. The Bank is offering internet services to CBS customers and already around 20000 customers are using this facility. The Bank's Customer Relationship Centre at Gurgaon has been functional since June 15, 2004 and is receiving an average of 1000 calls per day.

The Corporate Internet Banking launched by the Bank would enable a corporate customer to monitor and manage all his accounts across the country, from anywhere across the globe. The USP of the product is that the Corporate can do most of the banking transactions at their own convenience with minimal or zero intervention from the Bank.

The Bank's efforts in IT implementation have been widely recognized and PNB has been awarded the following awards during this year : NASSCOM Best IT User Award in BFSI Sector CIOL Dataquest Enterprise Connect Award 2004 IDRBT Award for Best Techno Savvy and Customer Friendly Services Branch (ECE House) for 2003

PNB is the first Public Sector Bank to draw Credit Information Report from CIBIL data base. The bank’s efforts in this regard have been appreciated by Reserve Bank of India.

As part of its diversification plans, the bank has taken up Corporate Agency for the New India Assurance Co. Ltd. for marketing non-life insurance products. The bank has also entered into distribution tie-up with Principal Financial Group as Joint Venture Partner.

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