Punjab National Bank (PNB) today reported a decline of 20.5 per cent in its net profit for the last quarter ended March 31,2013 at Rs 1,131 crore on account of higher provisioning towards bad loans. The state-run bank's net profit during the same quarter in the previous fiscal stood at Rs 1,424 crore. "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). "break up for the full year,last year (2011-12) we had provision of Rs 2,403 for NPAs,this year (2012-13) we made provision of Rs 3,330 crore. Now this is the reason why the net profit is less compared with the last year," Chairman and Managing Director KR Kamath told reporters here. Kamath said the bank started the year with gross NPA of Rs 8,720 crore,out of which Rs 1,942 crore was recovered during 2012-13 as against Rs 1,675 crore in the preceding fiscal. Also,the bank had to do a technical write-off to the tune of Rs 881 crore in 2012-13,he said. During January-March,the total income of the bank grew by 5.5 per cent from a year ago to Rs 11,554 crore on account of 7.2 per cent growth in interest income,Kamath said. For the fiscal 2012-13,bank's net profit fell by 2.8 per cent to Rs 4,748 crore. While total income during FY'13 rose by 13.5 per cent to Rs 46,110 crore due to a growth of 15 per cent in interest income. Net interest income during FY'13 rose by 10.8 per cent to reach Rs 14,857 crore as against Rs 13,414 crore in FY'12. The net non-performing assets (NPAs) or bad loans in the fourth quarter decreased to 1.52 per cent from 2.35 per cent in the same period a year ago. In absolute terms,net NPAs decreased to Rs 4,454.24 crore,from Rs 7,236.51 crore. While,gross NPAs stood 2.93 per cent in Jan-Mar (Rs 8719.63) from 4.27 per cent (Rs 13,465.80 crore) year ago. "We are working to bring down further our NPAs. Credit growth has been 5.1 per cent. Had we recorded a higher credit growth,NPA percentage would have been low," he said. Kamath said that the bank is trying to manage the badloans than the credit growth and it can further improve the NPAs unless there are more economic challenges. Shares of PNB rose by 4.57 per cent to end at Rs 783.45 apeice on the BSE today. Asked about the deposit and credit growth rate of the bank in the current fiscal,he said: "The RBI has said that deposit growth (of the industry) is 14 per cent and credit growth is expected to be 15 per cent. We are already going 2 per cent above this and we hope that we would be growing 2 per cent more than the industry growth." The net interest margin (NIM) of the bank during 2012-13 stood at 3.52 per cent. Giving guidance on the NIM for 2013-14,Kamath said: "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 (2013-14)." In reply to a question whether the bank has any plans to pass on the benefits of 0.25 per cent repo rate cut by the Reserve Bank recently,he said the bank is working on to reduce the cost of deposits. "The deposit growth has been lower than the credit growth. 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. He said there is a liquidity pressure also and the system is running on a deficit liquidity of about Rs one lakh crore.
