Punjab National Bank expects to maintain growth in business and profitability in the first half of the financial year ending March 31, 2010. Addressing presspersons here, Nagesh Pydah, Executive Director, said the bank could very well achieve higher growth in deposits and advances on a year-on-year basis and maintain the profitability as that of the quarter ended June 30, 2009 with judicious shuffling of available funds.

The bank was thus not affected due to slow down in global as well as domestic economy as the bank maintains the net interest margins.

The cost of funds was between 5.60 per cent and 5.94 per cent. The net margins in the second quarter of the current accounting period would be in the range of 3.5 per cent against 3.41 per cent in the previous year and 3.62 per cent for the whole of 2008-09.

“Unlike other banks, who offered interest rate of about 10 per cent for long term period fearing liquidity crunch, the bank maintains the interest rate on deposits as in the previous years.

This enabled the bank to tap more business competitively and maintain the net interest margins without any strain,” he said. As regards income from treasury operations, the bank has realised income as that of the previous quarters, though the first quarter was a boom period for realising higher income, Mr. Pydah said.

At the same time, the bank has been focussing more on small and medium enterprises and the advances to this sector account for about 33 per cent of the total.

As the major portion of advances extended to the services sector and a smaller portion to the manufacturing sector, Mr. Pydah would not find any risk of recovering advances. The bank got cleared about 90 per cent of non-performing assets. The bank has been maintaining the capital adequacy ratio above 12 per cent and already achieved the Basel-II norms.

If situation warranted, the bank may come with rights issue to meet liquidity and working capital needs, Mr. Pydah said. As per the provisional figures, Mr. Pydah said, the business of the bank as on September 30, 2009, stood at Rs. 3,95,220 crore, with deposits accounting for Rs. 2,30,937 crore and advances Rs. 1,64,283 crore as compared to the total business of Rs. 3,76,939 crore, deposits of 2,18,959 crore and advances of Rs. 1,57,979 crore at the end of June 30, 2009.

Mr. Pydah was here to distribute educational loans to meritorious students who are economically weak. Punjab National Bank has tied-up with Ernst & Young Foundation for extending scholarships to students.

Under the scheme, loans will be extended by the bank at various centres to students identified by the foundation.

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