New Delhi: Quarterly profit rose 59.2% on higher treasury income, recoveries and strong loan growth, Punjab National Bank chairman and managing director said on Wednesday.
“Little bit abnormal growth is because of other income. My recovery has been very good... (and there is) treasury income. That’s why it is 59%,” K.C. Chakrabarty said.
“But 25-26% profit growth is from core banking business, including loan growth, better management of assets and liabilities.”
The state-run bank’s March profit rose to Rs866 crore from Rs544 crore a year ago. Net interest income rose 25.7% to Rs19.07 crore in the quarter.
PNB grew its loans by 29.5% in the full year, and by a similar level for the March quarter, with borrowers turning to banks after other sources of funds dried up.
Treasury income came in at over Rs200 crore for the quarter, PNB’s head of treasury S.K. Dubey said. For the full year, it rose by a half to Rs664 crore.
The bank restructured Rs40 crore of loans in the full fiscal year, 70-80% of which was carried out in the March quarter, L.P. Agarwal, a chief general manager, said.
Separately, PNB has decided to sell a 26% stake in its fully owned unit PNB Housing Finance Ltd to investor Dawnay Day. Chakrabarty said the bank expected Rs70-77 crore from the sale, up from the original investment of Rs7 crore.
“The first divestment will happen before June,” executive director Tanksale said, adding the bank had an option to reduce its stake to 51% by issuing fresh shares to investors.
For the year to March, Chakrabarty forecast a 27% growth in net profit, helped by a 25% rise in loan growth and reduced cost of funds.
“We would like to maintain our net interest margin at around 3.5%,” he said. “By September, our cost of deposits should come down from current 6.29% to 5.5%.”
Shares in PNB closed 2.1% down at Rs677.55 in a Mumbai market that was down 1.69%.