State-run Punjab National Bank (PNB) has announced its results for the quarter ended December 2010. It has reported net profit at Rs 1,090 crore as against Rs 1,011.3 crore, a growth of 7.78% on year-on-year basis. Net interest income jumped 44.80% to Rs 3,203 crore from Rs 2,212 crore.
The bank's capital adequacy stood at 11.9% in Q3 FY11 as against 14.6%. Speaking on the bank's earnings, KR Kamath, CMD, PNB told CNBC-TV18 recoveries have been higher this time around than last year. Recoveries stood at Rs 955 crore for nine months in FY11. Net interest margins, he said, have also been steady at 3.99% for the first nine months of the fiscal. However, NIMs in Q3 came in at 4.17%. The bank also grew its current account and savings account or CASA, by 22.7% compared to what it did in the same quarter of last year. He added that total provisions against the second option pension were at Rs 3,600 crore. Kamath expects loan growth to be around 25% this year. Below is a verbatim transcript of the interview. Also watch the accompanying video. Q: The net interest income growth has been really good, up about 44%. But the net profit according to us has been marginally lower than expectations. Can you take us through what it looked like this time around? A: The net profit for the current quarter has been Rs 1,090 crore as compared to Rs 1,011 crore last year. But if you take the treasury profit impact out, last year we had a treasury trading profit from treasury to the tune of Rs 157 crore as against it is 87 crore during the current year. Last year we had Rs 71 crore coming from the sale of our stake in housing finance company last year. That's why our treasury trading profit last year was Rs 157 crore. If you take it out, in the present year we have done the same level of profit from treasury operations during the current year also. So if you take treasury profit out, our net profit last year was Rs 897 crore and this year it is Rs 1,047 crore recording a growth of 16.69%. There has been provisions made, there were some discussions, and we made a provision of Rs 1,288 crore during this quarter as against Rs 722 crore last year. This included provision for NPA to the tune of Rs 555 crore as against Rs 328 crore last year and provision for income tax of Rs 546 crore. You should appreciate one fact that when you make provision now, if there are new slippages coming, the regulatory provision required is 10%. But in order to maintain provision coverage ratio above 70%, you need to make provision beyond the regulatory provision required. That is why you see more and more provisions getting into the non-performing assets. Q: If you can take us through the NPAs. In the second quarter there was a bit of a worry, it had gone up to 4,000 crore plus. It has not quite climbed downDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
