PNB ramps up growth target amid zonal rejig

Punjab National Bank (PNB) has announced an upward revision for its business growth target for 2005-06 following its new restructured zonal setup.

S C Gupta, chairman and managing director said, "PNB will definitely acquire additional businesses to the tune of Rs 2,000-3,000 crore with its new zonal structure, under which seven additional offices have been set up this month."

The new structure would reduce work pressure and therefore, would enhance the efficiency of each zone, he explained.

PNB would thereby witness a annual business growth of 18 per cent in 2005-06 as compared with the previous target of 17 per cent growth, Gupta added.

PNB will gradually phase out its low yielding advances and proceed to the retail and SME sector, Gupta added.

"We need to look into our risk appetite. Diversification of credit portfolio and risk mitigating measures are most important. We would like to further tap the rural and semi rural areas where 67 per cent of our branches are located," Gupta added.

Gupta explained that the bank would focus much more on the bottomline and therefore, such risk mitigating measures and lending mix change might be necessary.

He said the bank has avoided excess liquidity and effective asset-liability management has led to an increase in net interest margin.

Referring to recent RBI's approval for opening branch offices in Hong Kong, off-shore banking unit in Singapore, subsidiary in Vancouver and conversion of representative office of London into a subsidiary, Gupta said, "We will first focus on converting the London representative office into a subsidiary."

Meanwhile, PNB Gilts, a subsidiary of PNB, would record growth in its net profit in 2005-06. "In the first nine months of operation, net profit of PNB Gilts have already crossed last year's corresponding figure of around Rs 35 crore," he added.