| Operating Results |
| For the quarter ended September 30, 2006 (Q2-FY2007), Net Interest Income increased by 44 % to Rs. 1,350 million from Rs. 941 million in the corresponding quarter last year. Net Interest Margin for the quarter ended September 30, 2006 has improved to 4.7% this is significantly higher than that last year (Net Interest Margin for the Q2-FY2006 was 4.4%) and is among the highest in the industry. Other income increased by 70% to Rs. 881 million in Q2-FY2007 from Rs. 517 million in Q2-FY2006 Non interest income now forms 40% of the Bank's total operating income as compared to 36% in the corresponding quarter last year. |
| Operating expenses for Q1-FY2007 increased to Rs. 1,609 million from Rs. 1,190 million during Q2-FY2006. |
| Subsequent to the merger with Bank of Punjab the Bank had tax credits which resulted in a tax credit of Rs. 136 million in the quarter ended September 30, 2006. The bank has now exhausted all its tax credits and its earnings are now subject to the maximum tax rate. Consequently the Bank has provisions for taxes amounting to Rs. 195 million this quarter. |
| The Bank's earnings per share (non-annualized) increased to Rs. 0.21 from Rs. 0.16 in the same period last year. |
| The bank has fully provided for all the provisions required under 'Accounting Standards 15' related to retirement benefits. |
| Advances Portfolio |
| As of September 30, 2006, retail advances constituted 68% of the total advances of the Bank. Net Retail Advances grew by 61% to Rs. 57,017 million from Rs. 35,314 million as of September 30, 2005, and by 9% over the previous quarter i.e. the quarter ended June 30, 2006 (Q1 FY2006). The Bank has increased its focus towards the business generated by Corporates including small and medium enterprises (SME), leading to a growth of 72% this quarter in the Bank's corporate and SME advances as compared to the corresponding quarter in the previous year; 19% over the previous quarter i.e. the quarter ended June 30, 2006 (Q1 FY2006). This segment is fast emerging as an important engine of growth for the Bank in addition to the existing retail business. |
| Asset Quality |
| As of September 30, 2006 the Bank's Net Non-Performing Loans were 1.3% of Net Advances, against 2.6% as of September 30,2005. |
| The bank follows an accelerated provisioning policy which is over and above the prudential provisioning norms prescribed by the Reserve Bank of India in respect of both NPAs as well as standard assets. |
| The bank is fully compliant with the prescribed provisions for standard assets that will come in effect from March 2007. No further provisions would be required to be made on the Bank's existing standard asset portfolio. |
| Deposits |
| The deposits of the Bank grew 41% to Rs. 113,836 million as on September 30, 2006 from those in the corresponding quarter last year. The bank's demand deposits grew 22% to Rs. 37,478. |
| The cost of deposits was 5.4% for the quarter ended September 30, 2006 however the Net Interest Margin for the Bank grew from 4.4% in the corresponding quarter of the previous year to 4.7% this quarter. The bank's CASA ratio is 33% at the end of this quarter as compared to 38% at the end of the corresponding quarter last year. The Credit "� Deposit ratio for the bank was 74% as on September 30, 2006. |
| Capital Adequacy and Net Worth |
| As of September 30, 2006, the Bank's total capital adequacy stood at 11.6%, the Tier I capital of the Bank was 10.5%. The Net Worth of the Bank was Rs. 11,099 million and the Book Value per Share was Rs. 7.5 as compared to Rs. 5.4 in the quarter ended September 30, 2005. |
| The Board of directors and the shareholders of the Bank have approved a preferential placement of upto 75 million shares to India Advantage Fund V acting through its investment manager ICICI venture funds Management Company limited; and upto 95 million shares to Bank Muscat. This preferential issue which is subject to regulatory and statutory approvals would raise the Bank's capital adequacy and provide the capital to drive further organic growth. |
| Merger with Lord Krishna Bank |
| The proposed merger of Centurion Bank of Punjab and Lord Krishna Bank was approved by the Board of directors of both banks in their respective meetings on September 4, 2006. Subsequently the proposal was approved by the shareholders of the Banks' at their respective general meetings held on September 30, 2006. Both banks have made an application to the Reserve Bank of India on October 3, 2006 for the requisite regulatory approvals. Once approved, the merger will result an improved nationwide franchise of 373 branches and extension counters, 446 ATM's, and about 3.5 million customers. |
| About Centurion Bank of Punjab: |
| Centurion Bank of Punjab is one of the leading new generation private sector banks in India. The bank serves individual consumers, small and medium businesses and large corporations with a full range of financial products and services for investing, lending and advice on financial planning. It holds leadership positions in the two-wheeler loan and commercial vehicle loan segments, is a strong player in foreign exchange services, personal loans, mortgages, education loans and agricultural loans, and credit cards. Additionally the bank offers a full suite of NRI banking products to overseas Indians. The bank also offers its customers an array of wealth management products such as mutual funds and life and general insurance. |
| Centurion Bank of Punjab operates on a strong nationwide franchise of 249 branches and 402 ATMs across 123 locations, and has approvals from the Reserve Bank of India to open a further 30 branches before the end of this fiscal year. Centurion Bank of Punjab is supported by over 5,000 employees. In addition to being listed on the major Indian stock exchanges, the Bank's shares are also listed on the Luxembourg Stock Exchange. |
| For more information log on to www.centurionbop.co.in |
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