Aided by strong net interest margin (NIM), Punjab National Bank (PNB) reported a 15.9 per cent increase in net profit for the second quarter ended September 30, 2010 at Rs 1,075 crore (Rs 927 crore).
NIM for the quarter under review improved to a handsome 4.06 per cent mainly on the back of increased interest income from advances due to hike in benchmark prime lending rate (BPLR) from August 1. Net interest income for the second quarter grew 49.4 per cent to Rs 2,977 crore (Rs 1,992 crore). For the half year ended September 30, NIM stood at 3.99 per cent.
The other reasons for strong NIM included focus on short-term deposits (rather than long-term) and also borrowing cheap through repo window rather than going in only for deposits.
PNB on Thursday launched two new deposit schemes — 555 days at 7.5 per cent and 1000 days at 7.6 per cent. Mr Kamath said that there was pressure on liquidity in the banking system.
This second quarter net profit performance came despite a substantial decline in treasury profits. For the quarter under review, treasury trading profit was Rs 38 crore (Rs 150 crore). For the first half, treasury trading income was Rs 159 crore (Rs 509 crore).
For the first half of the current fiscal, PNB's net profit grew 21.8 per cent to Rs 2,143 crore (Rs 1,759 crore). Total income grew by 14.6 per cent to Rs 14,037 crore.
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