It is my pleasure to present the Annual Report of your Bank for the
financial year (FY) 2010-11. While in most parts of the world financial
systems continue to be under strain, prospects for Indian financial
system remain bright with GDP growth estimated at 8.6% in 2010-11. As
Indias second largest bank, Punjab National Bank is well-positioned to
benefit from the improving growth prospects of the economy and deliver
value to customers and shareholders.
PNB has inherited sound banking tradition of 117 years and has a large
domestic footprint and presence in 9 global jurisdictions. This, along
with more than 6 crore customers and strong technological base, gives
us an edge over our peers. Your Bank has always undertaken sustainable
business by supporting the productive sectors of the economy, promoting
innovative and customer-friendly products and services and following
responsible business practices. In order to maintain our front-line
position, we need to keep re-inventing our business strategy, without
compromising with our core philosophy of prudent banking.
Now let me share with you PNBs operational and financial performance
during the FY 2010-11. I am happy to inform you that backed by strong
business and earnings performance, the Bank once again emerged as the
number ONE nationalized bank in the country.
Financial year 2010-11 was an eventful year with the Bank crossing
number of milestones. While total business crossed Rs.5.55 lakh crore
at the end of March 2011 compared to Rs. 4.36 lac crore last year,
registering Year- on-Year (YoY) growth of 27.3%, global deposits
reached Rs. 3.12 lac crore (25.5%) and global gross advances touched
Rs. 2.42 lac crore (29.7%).
Growth in the credit was mainly driven by Retail and MSME. Under retail
credit segment, Education Loans, Auto Loans and Housing Loans with
growth of 24% were the major contributors. Loans to MSME sector, which
is thrust area of the Bank, registered a growth of 29.3%.
Bank also paid equal attention to asset quality. Gross NPA ratio stood
at 1.79% at the end of March2011. Similarly, Net NPA to Net Advances
ratio stood atO.85%.
Along with increased business, Banks productivity indicators have
shown improvement. While Business per employee grew to Rs. 10.17 crore
in March2011 from Rs. 8.08 crore at the end of March 2010, Business
Per Branch showed improvement to Rs. 104.8 crore from Rs. 87.1 crore at
During the year, your bank has shown excellent financial performance.
Operating profit stood at Rs. 9056 crore for the FY ended 2010-11,
growing by 23.6% from Rs. 7326 crore last year. Net Profit at Rs. 4433
crore registered a growth of 13.5%. Interest income rose by 33.2%,
while income from Commission, Exchange and Brokerage posted growth of
The improved financial performance has resulted in better earnings
performance. For the FY ended 2010-11, Net Interest Margin (NIM) stood
at 3.96% compared to 3.57% in FY 2009-10. With better profit
performance, Return on Assets (RoA) and Return on Equity (RoE) stood at
1.34% and 22.13%, respectively. Bank will continue its focus on
sustaining the high earnings performance by keeping strict control on
costs and revenue maximization.
Banks Capital to Risk Asset Ratio (CRAR) complying with Basel II
requirements stood at 12.42 % (Tier-I capital: 8.44%; Tier- II Capital:
3.98%) at the end of March 2011. Bank is confident of successfully
meeting the challenges of migrating to Basel III prescriptions.
Recognizing that technology holds the key for outreach and maximizing
the large franchise value, your Bank has been taking various
initiatives. With well developed alternative delivery channels, the
Bank has been focusing on channel management aimed at customer
I am happy to state that your Bank has earned awards and accolades
during the year in appreciation of excellence in services, Corporate
Social Responsibility (CSR) practices, transparent governance
structure, best use of technology and good human resource management
practices. Your Bank has been conferred with the Gold trophy of SCOPE
Meritorious Award for Best Managed Bank, Financial Institution or
Insurance Company for 2009-10 by Her Excellency the President of
India. PNB has found place in the league tables in various categories.
PNB figures as one of the top 5 banks in India according to The
Banker magazine, London. The Bank ranks at 257th position amongst
worlds Top 1000 Banks. As per Forbes magazine, PNB tops the list of
nationalized banks with a global ranking of 653. The Bank is ranked
24th Best Company amongst top 500 Indian Companies as per Economic
Times. Business World recognized PNB as the 3rd best large bank and 5th
Fastest Growing Bank for 2010, while Business Today ranked it as 14th
Most Valuable Public Sector Companyfor 2010.
PNB will continue to make investments in technology, new products, risk
management and towards expanding franchise value. Such investment will
facilitate the Bank to retain competitive advantage. Indias demography
is undergoing significant changes. With rapid economic growth, rising
incomes and changes in customer expectations, banking services have to
be refashioned. We will have to offer consistent banking experience to
the customers irrespective of the channel he or she may prefer to use.
Our products and services will have to be user-friendly, innovative,
competitive and seamlessly integrated across channels. As business
opportunities expand, the bank will have to remain alert, nimble-footed
and execute its strategy effectively. With its inherent strengths and
support from stakeholders, I am quite confident that your Bank will
successfully meet the challenges and touch new frontiers in business
growth and performance.
With warm regards,
Chairman & Managing Director