Punjab National Bank (PNB) Q4 07/08 earnings summary

Executive summary

• FY07/08 operating profit reached Rs 4,006.24 crore and net profit Rs 2,048.76 crore, the highest among nationalised banks; total business rose 20.9% to Rs 2,85,959 crore.

• Q4 net profit rose 128.75% to Rs 543.76 crore, despite Rs 180 crore of prior-year tax provision, Rs 100 crore of NPA floating provision and Rs 100 crore for wage revision.

Financial highlights

• Total income rose 25.4% to Rs 16,262 crore; interest income increased 27.0% to Rs 14,265 crore and net interest income rose 6.2% to Rs 5,534 crore.

• Non-interest income increased 15.4% to Rs 1,997 crore; operating expenses rose 6% to Rs 3,525 crore, while provisions and contingencies declined to Rs 1,957 crore from Rs 2,077 crore.

• Deposits grew 19.0% to Rs 1,66,457 crore; advances rose 23.7% to Rs 1,19,502 crore. Current and savings deposits were 42.99% of deposits.

Outlook and guidance

• FY08/09 priorities include low-cost deposit mobilisation, asset-quality improvement, retail lending, agriculture and SME credit, and scaling technology-enabled financial inclusion.

• Plans included bringing remaining branches onto CBS by March 2009 and targeting financial inclusion across 30,000 villages, 15 million households and 75 million people by 2010.

• RBI projected FY08/09 real GDP growth of 8–8.5%, assuming global conditions broadly followed the central scenario and the domestic monsoon was normal.