×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

PNB Jan-March net slightly up; sees 3.5% NIM in FY12

PNB Jan-March net slightly up; sees 3.5% NIM in FY12
Comment E-mail Print Share
First Published: Wed, May 04 2011. 07 01 PM IST
Updated: Wed, May 04 2011. 07 01 PM IST
New Delhi: State-run Punjab National Bank Ltd (PNB) on Wednesday posted a modest 5% rise in net profit for Jan-March, mostly on higher provisioning, and said it expects margins of about 3.5% FY12.
PNB, India’s No. 2 public sector lender, expects its net interest margins to remain under pressure as the central bank adopts a tighter monetary policy, chairman & managing director K.R. Kamath told reporters.
Central bank on Tuesday stepped up its fight against stubbornly high inflation, raising interest rates by a bigger-than-expected 50 basis points and vowing to battle price pressures even at the cost of some economic growth.
PNB, on Wednesday raised its benchmark prime lending rate (BPLR) and base rate by 50 bps each to 13.50% and 10.00% respectively to tackle a hike in cost of funds that arises in a high rate environment.
The interest rate hike, coupled with a rise in savings rate could put Indian banks in a tight spot as they struggle with higher borrowing costs compounded by the inability to raise lending rates sharply on concerns of moderating loan demand.
Kamath said he expects the rise in savings rate to hurt the bank’s cost of funds by about 15 basis points.
Provisioning for loan losses for Jan-March rose 16.4% to Rs 544 crore.
Kamath said he expects the bank’s non-performing assets to remain at about 2% of total assets, going forward.
PNB is evaluating bids from Indian and foreign companies for strategic partnerships in insurance business, and a final decision on the same is expected within April-June, Kamath said.
It short-listed Bharti Axa Life, Aviva Life and MetLife for a life insurance tie-up, according to a report.
PNB shares, valued at close to $8 billion, closed down 2.33% at Rs 1116.90 on the National Stock Exchange. The benchmark sensex closed down 0.35%, while the BSE Banking Index rose 0.13%.
Comment E-mail Print Share
First Published: Wed, May 04 2011. 07 01 PM IST