Punjab National Bank (PNB) Q4 08/09 earnings summary

Executive summary

• FY09 delivered operating profit of ₹5,744 crore and net profit of ₹3,091 crore despite additional prior-year tax and wage-revision provisions.

• Total business reached ₹3,64,463 crore, up 27.5% YoY; deposits grew 26.0% and advances 29.5%.

• Priority-sector lending exceeded national targets; net NPA ratio fell to 0.17% from 0.64%.

Financial highlights

• Total income rose 36.8% to ₹22,246 crore; interest income increased 35.5% to ₹19,326 crore and non-interest income rose 46.2% to ₹2,920 crore.

• Net interest income increased 27% to ₹7,031 crore; operating expenses grew 19.3% to ₹4,206 crore.

• Operating profit rose 43.4% to ₹5,744 crore; provisions and contingencies were ₹2,653 crore versus ₹1,957 crore; net profit increased 50.9% to ₹3,091 crore.

• Additional provisions included ₹85.27 crore for prior-year income tax and ₹500 crore for wage revision and post-retirement medical benefits, taking cumulative wage-related provision to ₹600 crore.

Outlook and guidance

• RBI projected India’s real GDP growth at ~6% for FY10; recovery timing remained uncertain, with early improvement signals cited in automobiles, cement, power and consumer durables.

• Strategic targets included growing the customer base from over 38 million to 150 million by 2013 and establishing 100,000 touch points in unbanked villages.

• Planned priorities included SME, agriculture and education lending, financial inclusion, selective international expansion and upgraded technology infrastructure.