Interest margins hit PNB net

Squeeze in net interest margin saw Punjab National Bank post a modest 6.6 per cent increase in net profit at Rs 538 crore in the July-September quarter of 2007-08 compared with Rs 505 crore in the same quarter last year.

"The profit was hit by the recent increase in cash reserve ratio, rise in defaults in below-Rs 10 lakh loan accounts and higher provisioning towards pension and gratuity under new accountancy norms," said chairman and managing director, K C Chakrabarty.

However, the second largest public sector bank is likely register a much higher profit growth in the October-December quarter, Chakrabarty added. The bank's net interest margin has come down to 3.49 per cent as of September 2007 from 3.86 in the same period last year.

The bank's gross and net NPAs have gone up to 4.57 per cent and 1.86 per cent from 3.67 per cent and 0.18 per cent respectively, due to a default in below Rs 10 lakh loan accounts in all segments including housing, trade and agriculture.

"Our immediate focus is on arresting slippage and improving the recovery of bad loans," Chakrabarty said.

OBC net profits dip
The city-based public sector lender Oriental Bank of Commerce reported 24 per cent dip in net profit to Rs 236 crore in the July-September quarter compared with Rs 311 crore in the same period last year.

"Higher deposit rates had a dampening impact on net interest margin (NIM)," said chairman and managing director, Alok K Misra. The bank's NIMs stood at 2.42 per cent as of September 2007. "We would like to improve the NIMs," Misra added.

The total income in the July-September quarter rose 28 per cent to Rs 1,788 crore, from Rs 1,396 crore in the same quarter last year.