State-owned Punjab National Bank (PNB) on Tuesday reported 13.81 per cent increase in net profit at Rs 575.34 crore for the second quarter of financial year 2014-15 as compared to net profit of Rs505.49 crore during the corresponding period last year. The company's net profit was largely driven by robust growth of other incomes.
"Other income showed a robust growth of Rs1,558 crore (quarter ended September) as compared to Rs 899 crore of last year. All non-interest income component have performed well that contributed to 73 per cent growth in other income. We had good recovery in return of assets this year. We had recovery of Rs483 crore on the return of assets," said PNB Chairman and Managing Director KR Kamath.
The bank's total income increased to Rs13,020.46 crore during the second quarter ended September 30, 2014, up 11.92 per cent from Rs 11,632.84 crore in the same period last year.
The management continues to focus on improving its net interest margins (NIM). "Of course we had given a guidance that for the year the NIM will be somewhere around 3.2 to 3.25 percent, for the half year it is at 3.3 percent and as a management we will always focus on improving the NIMs. So we will work on improving the NIMs from the present levels," Kamath added.
The bank's asset quality deteriorated marginally with gross Non Performing Assets (NPAs) climbing to 5.65 per cent in the quarter under review from 5.48 per cent in April-June quarter."So out of Rs 1638 crore what we have provided for the NPAs, Rs961 crore is the regulatory provision and Rs677 crore is over and above the regulatory provision," Kamath added.
However, provisions towards bad assets increased by 13.37 per cent to Rs 2, 300.69 crore during the quarter under review. The bank made an additional provisioning for wages by Rs60 crore during the quarter.Total business of the bank rose to Rs 8.31 lakh crore in September 2014 as compared to Rs7.20 lakh crore in September 2013. Net advances were at Rs3.57 lakh crore at the end of September, up 13.7 per cent from year ago.
"Credit growth has been subdued because of the negative growth in the large industry. The risky areas or where we have stressed (assets), we have clearly stayed away," Kamath said.