As in the case of other banks, fourth quarter numbers of Punjab National Bank also points towards rising interest costs and a decline in net interest margin. Though PNB has managed its operational costs very well, a sharp jump in provisions impacted the bottom line.
For the fourth quarter ended 31 March 2006, net profits declined 19.95 per cent to Rs288.67 crore from Rs360.63 crore. Total income increased to Rs2,890.41 crore from Rs2,562 crore for the previous year quarter.
Interest income increased 13.01 per cent to Rs2,468.91 crore from Rs2,184.65 crore for the previous year quarter. Interest expenses increased by 15.83 per cent to Rs1,288.72 crore from Rs1,112.57 crore. Income from treasury operations and other income rose 11.7 per cent as compared to the previous year quarter.
Operating expenses declined by 34.59 per cent over the previous year quarter while staff costs declined substantially by 43.35 per cent. Other operating expenses were lower by 16.39 per cent. But most of these cost savings were negated by a sharp rise in provisions to Rs611.14 crore from Rs52.7 crore.
For the full year 2005-06, net profits increase marginally by 2.07 per cent to Rs1,439.31 crore from Rs1,410.12 crore. Total income increased 6.74 per cent to Rs10,815.31 crore from Rs10,135.53 crore for the previous year.
Total interest income for the year increased 13.29 per cent to Rs9,584.15 crore from Rs8,459.85 crore. Interest expenses increased at a lower 10.43 per cent to Rs4,917.39 crore from Rs4,453.11 crore for the previous year.
Income from treasury operations and other income declined 26.53 per cent to Rs1,231.16 crore from Rs1,675.68 crore.
Operating expenses for the full year increased marginally by 1.61 per cent. Staff costs for the full year declined marginally while other expenses went up by 6.35 per cent. Provisions were higher by 4.67 per cent for the year.
Consolidated net profits for the year 2005-06 increased 9.53 per cent to Rs1,532.71 crore from Rs1,399.36 crore for the previous year. Consolidated income increased 7.78 per cent to Rs11,002.96 crore from Rs10,208.73 crore.