PNB shifting gears to become a retail bank in big way

Punjab National Bank (PNB) is "shifting gears" to change itself into a retail bank in a big way, Usha Ananthasubramanian, Managing Director and CEO, has said.

As part of risk diversification strategy, the bank will focus on expanding the share of "small value loans” in its balance sheet, Usha said at a press conference to announce the second quarter results.

Special focus will be on retail loans. There is ample room for PNB to expand its retail loan book and this would be the way forward, she said.

For the second quarter ended September 30 this year, PNB on Friday reported a 7.9 per cent increase in net profit at Rs. 621 crore (Rs 575 crore). For the half year ended September 30, PNB's net profit stood at Rs. 1,342 crore.

On non performing assets, Usha said that the picture was better than the first quarter and the trend was in the direction of reducing NPAs.

In a change of tack, PNB has now decided to look at selling stressed assets to asset reconstruction companies (ARCs).

For the last 5-6 years, PNB had desisted from selling assets to ARCs.

"It is very difficult to say where we will land on the NPA front when we close the current fiscal. One thing is for sure, we are seriously focused on reducing NPAs and improving recoveries", she said.

Srivats.kr@thehindu.co.in


Source : Thehindubusinessline

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SBI reports 25% jump in Q2 net profit to Rs. 3,879 cr

State Bank of India (SBI), the country’s largest bank, reported a 25% jump in net profit for the July to September quarter to Rs. 3,879 crore. The profit was driven by a jump in other income due to strong performance of treasury operations and lower provisions for bad loans.

Net profit for the second quarter of the last fiscal year was at Rs. 3,100 crore.

Net interest income, difference between interest earned and expended, was at Rs. 14,253 crore , up 7 per cent from Rs. 13,275 crore in the comparable quarter last year. Other income rose 36% to Rs. 6,197 crore compared to Rs. 4,750 crore in the second quarter last year.

Asset quality at the bank improved for the bank as against the trend of a number of public sector banks.

Bad loans

Gross non-performing assets (NPAs) were at 4.15 per cent at the end of the September quarter compared to 4.29 per cent at the end of the June quarter and 4.89 per cent in the same quarter last year.

During the July-September quarter, the bank set aside Rs. 3,842 crore as provisions for bad loans compared to Rs. 3,359 crore in the April-June quarter. Compared to the second quarter of last year, provisions were 7 per cent lower.

Post-provisioning, net NPAs were at 2.14 per cent of total loans compared to 2.24 per cent in the June quarter and 2.73 per cent in the September 2014 ended quarter.

At 1.15 pm, shares of SBI were trading 2.4 per cent higher at Rs. 239.85 per share on the BSE.


Source : Thehindubusinessline

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Bank of Baroda Q2 profit tumbles as provisions spike

Bank of Baroda Ltd's, India's second-biggest state-run lender by assets, second-quarter profit slumped about 89 per cent on Friday, hit by a sharp rise in provisions as bad loans jumped.

Shares in the Mumbai-based bank, which in August became one of the first state owned lenders to appoint a private sector chairman, tumbled almost 10 per cent at the market open. At 10.10 am, the stock was down 3.3 per cent or Rs. 5.40 at Rs. 154.10 on the BSE.

Net profit fell to Rs. 124 crore ($18.9 million) for its quarter ended September 30 from Rs. 1,104 crore reported a year earlier, the Mumbai-based lender said in a statement on Friday.

The gross bad loan ratio for the quarter rose to 5.56 per cent, a jump from 4.13 per cent in the previous three months and 3.32 per cent in the same quarter a year earlier.


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Union Bank net zooms 77% at Rs. 658 cr

Union Bank of India today reported a massive jump of 77 per cent in its net profit to Rs. 658 crore for the September quarter.

The bank had reported net profit of Rs. 371 crore in the July—September quarter of the previous fiscal.

Global business grew by 7.4 per cent to Rs. 5,84,687 crore as on September 30 of the current fiscal, while deposits soared by 10.2 per cent to Rs. 3,30,665 crore, Union Bank said in a statement.

Advances grew by 3.9 per cent to Rs. 2,54,022 crore.

Net interest income for July—September quarter of 2015—16 increased by 0.8 per cent to Rs. 2,102 crore from Rs. 2,085 crore in the same quarter of last fiscal.


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Vijaya Bank Q2 net drops 20% to Rs. 115 cr

Vijaya Bank on Friday reported a 19.80 per cent fall in its July-September quarter net profit at Rs. 115.29 crore, impacted by higher provisions.

The bank had registered a net profit of Rs. 143.75 crore in the corresponding quarter last year.

Total income of the bank stood at Rs. 3,202.89 crore for the quarter ended September 30, 2015 from Rs. 3,253.75 crore in the corresponding quarter a year ago.

“Even though there is increase in the operating profit, but because of the increased provision net profit has come down. This quarter we had to make a provision of Rs. 283 crore, out of that Rs. 272 crore was only on account of NPAs. Because of the increased provision for NPAs, net profit has come down,” Vijaya Bank MD & CEO Kishore Sansi told reporters here.

“Net slippage is around Rs. 600 crore in this quarter and most of it has come from infrastructure and large corporates,” he added.

The bank’s gross NPA ratio as on September 30 was 3.98 per cent against 2.85 per cent during the corresponding period last year, while the net NPA stood at 2.84 per cent as against 1.88 per cent last year.

The provision coverage ratio was at 58.28 per cent at the end of September quarter.

Net interest income for three months ended September 2015 increased to Rs. 692.55 crore from Rs. 578.70 crore for the corresponding period last year, up by 19.67 per cent.

Other income of the bank increased from Rs. 169.85 crore in the second quarter of last fiscal to Rs. 193.93 crore for the corresponding period this year, up by 14.18 per cent.

CASA of the bank increased from Rs. 23,348 crore as of September 30, 2014 to Rs. 25,311 crore this year, up by 8.41 per cent. The percentage of CASA deposits also improved to 20.53 per cent from 18.95 per cent.

Responding to a question on plans to raise capital, Sansi said “We had requested government of India to infuse about Rs. 400 crore of capital. They may take a decision either by end of this quarter or early next quarter, but any case we have a plan to go in for tier-I capital of about Rs. 200 crore and tier-II of about another Rs. 200 crore in the coming quarter.”

“Our objective is to reach a figure of about 11.5 per cent CRAR by March 2016,” he added.

The bank said its total number of branches increased to 1,755 as on September 30 this year, while total number of ATMs stood at 1,496.


Source : Thehindubusinessline

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