New Delhi: India's second largest public sector lender Punjab National Bank's fiscal fourth quarter (Jan-Mar) net profit rose 18.6% on-year to Rs 14.24 billion, led by higher income from interest and investments but provisions increased, pulling the stocks down.
The bank's provisions for bad loans and contingencies for the quarter rose 41.12% to Rs 10.27 billion against Rs 7.28 billion in the same period a year ago, Punjab National Bank said in a filing to stock exchanges Wednesday.
The bank's shares fell over 2% on the news amid a flat broader market.
Punjab National Bank's rise in provisioning for bad loans during the quarter reflects the stress faced by most of the state-run banks, which have posted results so far, on account of their exposure to financially troubled sectors like power distribution companies, aviation and textiles.
Net interest income of the company in the three months to March 31 rose 9.3% to Rs 33 billion from Rs 30 billion in the same quarter previous fiscal 2010-11.
The bank's total expenditure during the quarter increased 32% to Rs 80.19 billion from Rs 60.8 billion in the same quarter a year ago.
Punjab National Bank's outstanding advances at the end of March 31 were at Rs 2.93 trillion, rising by 21.34%, from Rs 2.42 trillion a year ago, while its total deposits as on March 31 at Rs 3.79 trillion, rose by 21.31%, as compared to Rs 3.12 trillion a year ago.
Gross non-performing assets (NPAs), or bad loans, increased to 2.93% of advances as on March 31 from 1.79% in the same period previous fiscal year, while its net NPAs rose to 1.52% from 0.85%.
Capital adequacy ratio -- the amount of capital in proportion to a lender's advances -- of the bank was at 12.63% at the end of the quarter higher than 12.42% recorded in the same period last fiscal year.
Its net interest margin (NIM) for the fourth quarter was at 3.5%.
The bank's board of directors recommended 220% dividend to its shareholders for fiscal 2011-12.
Punjab National Bank's shares Wednesday were trading at Rs 768 on the Bombay Stock Exchange (BSE) at 2:33 pm, down 2% from the previous close.