By Sanjiv Shankaran
New Delhi: Punjab National Bank (PNB), India’s fourth largest bank by total business, recorded a net profit of Rs425.07 crore in the first quarter of 2007-08, higher by 15.70% compared with the corresponding period of the previous year. The net profit growth came largely on the back of a growth in total income, which rose 29.88% on-year to record Rs3,795.10 crore in the first quarter.
“The basic strategy (in 2007-08) is to shave low margin advances and high cost deposits. There’s no point in keeping unprofitable business on my balance sheet,” said K.C. Chakrabarty, chairman and managing director, PNB, at a press conference.
PNB’s cost of deposits in the first quarter of 2006-07 was 5.46%, 108 basis points higher than 4.38% in the corresponding period of the previous year.
PNB’s advances in the first quarter of 2007-08 grew 23.35 on-year to record Rs95,640 crore and deposits rose 21.7% to Rs1,42,609 crore.
The bank has lowered its business target for the rest of the year to meet its aim of profitable growth.
The credit growth in the current financial year is expected to be around 20% and deposit growth about 16%, said Chakrabarty.
PNB’s share price closed today at Rs552.70 on the Bombay Stock Exchange, down by 1.91%.