Punjab National Bank (PNB),the countrys second largest public sector lender,on Thursday scaled down its target for net interest margin to 3.35 per cent for 2013-14 as against 3.52 per cent last fiscal.
The time has come for me to revise my guidance for net interest margin a little downward may be to 3.35 per cent for the full year, said KR Kamath,chairman,PNB.
A higher provisioning towards non-performing assets also weighed on the public sector lenders balance sheet and it posted a 20.6 per cent decline in its net profit for the fourth quarter,ending March 2013 at Rs 1,131 crore. It was significantly higher at Rs 1,424 crore a year ago.
For the full financial year as well,the bank registered a 2.8 per cent dip in its net profits at Rs 4,748 crore against Rs 4,884 crore in 2011-12. While total income during FY13 rose by 13.5 per cent to Rs 46,110 crore due to a growth of 15 per cent in interest income.
Reduction in the net profit is on account of increase in the provision what we made from Rs 5,730 crore to Rs 6,161 crore (in 2012-13)…this is the reason why net profit has come down, Kamath said.
But investors chose to ignore the results largely and PNB shares gained 4.57 per cent to close at Rs 783.45 a piece on Thursday on the BSE. The bank has also stepped up efforts to lower gross NPAs through higher recoveries.
We expect much improvement in asset quality,unless these is some surprise from the economy,Kamath said.
Gross NPAs came down to Rs 13,466 crore for the fourth quarter as against Rs 13,998 crore in the previous quarter while the gross NPA ratio eased to 4.27 per cent from 4.61 per cent in the same period. Net NPAs declined to Rs 7,237 crore in the fourth quarter from Rs 7,586 crore in the previous quarter.
Kamath said the bank would focus on efforts to improve recovery of loans,though it resorted to a technical write offs in the fourth quarter.
Meanwhile,Union Bank of India also reported a fall in NPAs which dropped to 1.61 per cent in the fourth quarter of the fiscal compared with 1.7 percent the previous quarter.
Union Bank of Indias gross non-performing assets as on March 31,2013 declined to 2.98 per cent from 3.01 per cent as on March 31,last year.
The banks net profit increased marginally by 2 per cent to Rs 789 crore during January-March quarter on the back of lower margins and higher slippages as against a net profit of Rs 773 crore in Q4 FY12.
Shares of Union Bank surged 6.6 per cent before closing 1.42 per cent higher at Rs 242.60 apiece on the Bombay Stock Exchange.
Bank rules out lending rate cut
New Delhi: Punjab National Bank on Thursday ruled out an immediate cut in lending rates in the wake of the RBI annual monetary policy last week. We have been thinking of transmitting policy rate cuts to customers. But it may not happen only through a reduction in lending rates, said KR Kamath,chairman,PNB.
Blaming liquidity pressure,he said the system is running on a deficit liquidity of about Rs 1 lakh crore. There is a pressure on the deposit growth…so we are working on to reduce the cost of deposit. We are waiting to see whether there is a possibility to reducing deposit rates,as and when it happens,we will look at passing on the benefits to the borrowers, he said. ENS