PNB March-quarter net profit down 21%

The Bank declared 270% dividend (Rs 27 on Rs 10 share) for 2012-13 when net profit dipped 2.8% at Rs 4,748 crore

PNB's net profit declined 20.6% at Rs 1,131 crore during the fourth quarter of the current financial year over Rs 1,424 crore as it made higher provisioning for non-performing assets.

Even then the Bank declared 270% dividend (Rs 27 on Rs 10 share) for 2012-13 when the net profit dipped 2.8% at Rs 4,748 crore. The bank had declared 220% dividend in 2011-12 when the net profit was Rs 4,884 crore.

Announcing the result, PNB CMD K R Kamath attributed the fall in net profit in Q4 to higher provisioning for NPAs. The bank made Rs 1,722 crore as provisioning in Q4, 2012-13, 13.9% higher than Rs 1,512 crore in previous Q4. Net NPA of the bank rose to 2.35% of advances in 2012-13 against 1.52% a year ago. Bank's gross NPAs rose to 4.27% against 2.93% a year ago.

Despite fall in net and operating profits, PNB share rose 4.57% at Rs 783.45 as the bank declared higher dividend and NPAs came down sequentially in Q4. While gross NPAs came down to 4.27% in Q4 from 4.61% in Q3, net NPAs fell 2.35% from 2.56% over the period. Provision coverage ratio also improved to 58.83% from 55.97% in this period.

But then, Bank's operating profit was too down 2.8% at 2,853 crore in Q4 over 2,936 crore a year ago. When asked what explained this, Bank's executive director Usha Ananthasubramanian said the bank also made over Rs 200 crore provisioning for wages for expected revision, besides a sum kept aside for pension and gratuity.

Kamath expected net interest margin to fall to 3.35% going forward compared with 3.52% in 2012-13. He, however, said the bank clearly has intention of holding on to NIM at 3.5 percent but market forces can bring it down.

Kamath hopes deposits and advances to grow at 16-17 percent by FY14 end as the liquidity is likely to improve in the economy with relaxation in monetary policy.Its total business grew four% at over Rs 7 lakh crore in 2012-13.

He said though the bank wanted to transmit RBI's policy rate cut, but liquidity pressures and lower deposit growth putting pressure. "As of now, we are holding on to rates," he said. Deposits grew 3.2% in 2012-13 to Rs 3.91 lakh crore. However CASA as percentage of total domestic depisots constituted 40.86% in 2012-13 against 36.19% a year ago.  

Kamath said the Bank's exposure to sensitive sectors like commercial real estate came down.

On coming out with wilful defaulter's list as was done by UCO Bank and loan recovery from Kignfisher, he said he did not wish to comment on specific cases. However, officials said of Rs 1,000 crore got by cosortium of banks through share sale, Rs 90 crore came to PNB. PNB has an exposure of Rs 490 crore to Kingfisher.