Net profit of state-owned Punjab National Bank declined almost 21 percent to Rs 1,131 crore during January-March 2013 owing to rise in provisions.
The state-run firm witnessed 44 percent rise in provisions on a year-on-year basis to Rs 1,478 crore. Total provisions were inclusive of all components like loans, investment and gratuity of Rs 166 crore.
But the firm posted 14 percent rise in its net interest income (NII) or the difference between interest earned and paid out to about Rs 3,780 crore during the quarter.
Some reports suggest that the bank reduced its share of bulk deposits substantially while the year-end short term loans (aimed at expanding credit growth) too contracted. This helped the bank to post a better interest margin.
The bank announced a little over 3 percent growth in deposit to Rs 3.91 lakh crore for year ended March 31, 2012-13.
During the quarter, gross non-performing asset ratio increased to 4.27 percent compared with 2.93 percent a year back suggesting the stress in credit quality.
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