PERFORMANCE  HIGHLIGHTS  2003-04

 

Shri S.S. Kohli, Chairman & Managing Director of the Punjab National Bank disclosed that the bank has achieved a Net Profit of Rs 1108.69 crore at the end of March 2004 as compared to Rs 842.20 crore at the end of March 2003 registering a growth of 31.6%. The bank could achieve the above level of net profit after providing for necessary provisions of Rs 2012.17 crore towards income tax, wealth tax, NPAs, standard assets, gratuity, pension, bonus, depreciation, etc., as compared to Rs 1475.09 crore in the previous year, thus registering an increase in provisions by 36.4%.

 

w     Operating Profit of the bank has touched Rs 3120.86 crore at the end of March 2004 as compared to Rs 2317.29 crore in the previous year, registering a growth of 34.7%.

 

w       Bank’s Capital and Reserves at the end of March 2004 increased to Rs 5012 crore compared to Rs 4033 crore last year, registering a growth of 24.3%. 

 

w        Capital to Risk Asset Ratio (CRAR) at the end of March 2004 at 13.10% was higher than 12.02% at the end of March 2003.

 

w        Total Business stood at Rs 135141 crore at end March 2004 as compared to Rs 116041 crore at end March 2003 registering a growth of 16.5%.

 

w       Total deposits of the Bank at the end of March 2004 amounted to Rs 87916 crore as compared to Rs 75813 crore in March 2003 showing an increase of 16%. The low cost deposits formed 45.9% of total deposits at the end of March 2004.

 

w        Advances at the end of March 2004 amounted to Rs 47225 crore as compared to Rs 40228 crore at the end of March 2003, registering a growth of 17.4%. The bank is having various lending schemes for housing, traders, professionals, army officers, government/PSU employees, pensioners, etc.

 

w        Mr. Kohli also informed that the outstanding retail advances grew by 40 per cent to touch Rs 9150 crore as on March 31, 2004. Retail lending constituted 19 per cent of bank’s credit. The major focus of retail lending was on housing and traders’ finance segments. The “Hub & Spokes Model" introduced at two Centres last year to facilitate centralized processing of housing loans was extended to 19 centres. The bank also set up four specialized Trade Finance Branches to facilitate lending to traders’ community. Further, the bank constituted a team of 146 members in all zones for marketing of various retail financial products and services.

 

w        With a view to assess the credit risk in scientific manner, all eligible borrowers availing aggregate credit limit of above Rs 50 lakh have been brought under the credit risk rating system of the bank. The bank has also implemented Preventive Monitoring System for all Large Corporate borrowers, which is a scientific monitoring tool comprising of 27 signals/indicators for evaluating the health of a borrowal account on a continuous basis. The Middle Office set up by the Bank assesses and minimises risks associated with integrated Treasury operations and has brought all market and liquidity risk management functions at one place.

 

w        The Operational Risk Management Committee constituted by the Bank at the apex level monitors progress on operational risk management. The Bank has also formulated an "IT Risk Management Policy" to take care of various IT risks. With a view to improve management functions and attain higher level of performance and efficiency, the bank introduced in-house Management Audit System.

 

w        Priority Sector (PS) advances at Rs 22989 crore formed 49.38% of net credit in March 2004, thus surpassing the national goal of 40 per cent. The bank issued 2.61 lakh Kisan Credit Cards during the year 2003-04, taking the total number of KCCs issued to 12.02 lakh by the end of March 2004.

 

w        The increase in agricultural advances during the year was Rs 2279 crore or 32.2%. Share of Agriculture credit to net bank credit improved further to 18.49 per cent, which is higher than the national goal of 18 per cent.

 

w        Credit to Small Scale Industry increased from Rs 4793 crore at end March 2003 to Rs 5701 crore as at end March 2004 registering an increase of 18.9%. Ratio of credit to small scale industries to net bank credit stood at  12.25 per cent. The bank received second prize for “Excellence in lending to SSI sector” consecutively for two years, i.e., 2001-02 and 2002-03 from the Government of India, Ministry of SSI.

 

w       Export credit at the end of March 2004 stood at Rs 3982 crore. The foreign exchange turnover increased to Rs 30922 crore during 2003-04. To expand overseas operations of the bank, steps have been initiated for opening a branch at Kabul, Afghanistan and representative offices at Shanghai, China and Dubai, UAE.  Besides, the bank has opened its first Offshore Banking Unit (OBU) at SEEPZ, Mumbai for catering to needs of units in SEZs and SEZ Developers.

 

w        The bank considers technology as a key driver in business development and continued its efforts in upgradation of technology. For the year 2003, BO : ECE House was awarded the “Best Branch Award for Techno-savvy and Customer-Friendly Branch”, among the public sector banks, by the Institute for Development and Research in Banking Technology (IDRBT), Hyderabad, the apex IT institute established by RBI. Last year, the same institution had conferred on the bank the “Best Bank Award for Excellence in Banking Technology”.

 

w        As on March 31, 2004, the bank achieved 100 per cent branch computerisation.  97 per cent of Bank's business is captured through computers. Core Banking Solutions (CBS) has been implemented in 504 Service Outlets (SOLs) covering 101 centres of country. The plan is to achieve connectivity in 1500-2000 branches in 3 years' time. The bank implemented Structured Financial Messaging Solutions (SFMS) for funds transfer from any of the CBS branches at 101 centres. The Bank also introduced Internet Banking which has 8300 users as of now. This service is available to all retail customers of the CBS branches. These customers can also book their Railway reservation tickets online. This facility would be further extended for payment of bills of utility companies, airlines tickets etc. The bank is a part of Real time Gross Settlement System (RTGS).

 

w        Out of 404 ATMs (with a card base of 5.60 lakh), 351 are networked providing online withdrawal facility. An ATM sharing arrangement with four other Banks, namely Oriental Bank of Commerce, Global Trust Bank, Indian Bank and UTI Bank, under ‘MITR’ logo has made available a pool of 1800 ATMs across the country to cardholders of the member banks and also any Master Card holder. The Bank has also signed an MoU with ICICI Bank offering the customers the facility of balance enquiry as well as cash withdrawal.

 

w        Mr. Kohli further added that Total income during the year rose to Rs 9647 crore from Rs 8735 crore in March 2003 registering a growth of 10.4%.  Interest income increased by  3.9% at the end of March 2004.

w        Total Expenses at Rs 6526 crore have registered a growth of 1.7% during the year. While interest expenses declined by 4.7%, non interest expenses increased by 15.3% during the year.

 

w        Staff productivity measured in terms of  business per employee increased to Rs 2.28 crore at the end of March 2004 compared to Rs 1.96 crore in the previous year.

 

w        The bank has the largest network of branches amongst nationalised banks with 4474 offices including 452 extension counters at the end of March 2004.

 

w        Despite implementation of 90 days delinquency norms for recognition of NPAs, the Gross NPAs reduced to Rs 4670 crore in March 2004 from Rs 4980 crore in March 2003. Total provisions for NPAs increased to Rs 1194 crore in 2003-04 from Rs 833 crore in 2002-03. Through a well defined Recovery Management Policy, the Bank was able to effect reduction of Rs 1354 crore in NPAs during the year as against Rs 706 crore last year. NPAs with outstanding of Rs 1 crore and above continue to be monitored at corporate level. Ratio of Net NPAs to net advances at the end of March 2004 declined to 0.98% compared to 3.86% at the end of March 2003.

 

w        During 2003-04, the bank achieved a turnover of Rs 539 crore in Gold Import Business while the turnover under Silver Import Business was Rs 132 crore. The ‘PNB International Credit Card’ a co-branded card with the Hongkong and Shanghai Banking Corporation Ltd. has been receiving good response. The bank has issued nearly 43,000 credit cards till March 2004. 

 

w        Mr. Kohli also informed that the LADDER, a system for computerization of Management Information System, asset classification and credit monitoring has been implemented enabling creation of comprehensive data base of all borrowal accounts. The system helps in generating analytical information to the decision makers, thereby helping in effective management of risks, product innovation and pricing in line with bank’s policies. Data creation in electronic form would also help the bank in rationalization of Returns.

 

w        The bank entered into an MOU with New India Assurance Company Limited on April 16, 2003 to act as its Corporate Agent for distributing its Non-Life Insurance Products. Since then, the bank trained 432 officials all over India for marketing of various insurance products of the company.

 

w        It is worth mentioning that PNB's attempts at providing best customer service has earned it a place among India's Most Trusted top 50 service brands in Economic Times-A.C.Nielson Survey.