PNB

The second largest private sector bank, PNB as it is popularly known, did not have a very good set of numbers for Q4FY13. Its net profit slipped 21% (YoY) at Rs.1131 crore and this was thanks to the 44% spike up in provisions at Rs.1478 crore. Yet, the market chose to ignore this and remained the top gainer on the BSE post these numbers. Probably the market decided to concentrate on other factors – NII for the quarter was up 14% (YoY) at Rs.3780 crore. NIM marginally improved from 3.51% to 3.52% (YoY) and from 3.47% sequentially. More importantly, the asset quality had vastly improved. Gross NPA ratio came down to 4.27% from 4.61% (QoQ) and Net NPA also decline from 2.56% to 2.35%. Provision coverage ratio also improved from 55.97% to 58.83% sequentially. Its cost to income ratio has also come down from 42.81% to 42.41% (YoY).

The improvement in NIMs was mainly on account of its conscious effort to reduce bulk deposits. This can be seen in the total deposits growth, which YoY was muted at 3% at Rs.391560 crore. CASA ratio was at 40.86% compared to 38.40% in Q3 and 36.2% in Q4Fy12. For FY13, the Bank posted a 11% rise in NII at Rs.14,857 crore but net profit for the year fell 3% at Rs.4748 crore. Clearly, the market is now concerned about asset quality and less about profitability, as has been seen by the rise in the share price.