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punjab national bank the name you can BANK upon

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Title: punjab national bank the name you can BANK upon


1
punjab national bank the name you
can BANK upon!
Performance Highlights Q1 FY07
  • Banking Excellence
  • since 1895

2
Indias Largest Nationalised Bank
218 banks in the Indian Banking System
Among the Nationalised Banks
Highest Low Cost Deposits
Largest Asset Base
Highest CASA
Largest Branch Network
  • Overtime the share of the Public Sector banks in
    total business of banking system has eroded from
    more than 93 in 1993 to about 76 in 2005.
  • However PNB has been able to maintain its share
    in the total business of banking system at around
    5.5 - 6 during the same period.

3
Presentation Structure
  • Performance Highlights
  • Operations Review
  • Income Profitability
  • Focus Area Strategy

4
Growing Size
(Rs. in crore)
Largest network amongst nationalized banks with
4514 offices
5
Financial Indicators
(Rs. in cr)
6
Performance Highlights- Q1 FY07
  • Higher Profitability
  • NIM increased to 4.10 in June06 from 3.85 in
    June05.
  • Yield on Advances improved to 8.81 (June06)
    from 8.32 (June05).
  • Cost of deposits stood at 4.38 in June06 which
    was the same as in Jun05.
  • Core operating Profit (excl. loss booked on
    transfer of securities) of the Bank increased by
    36.1 to Rs. 877.3 cr (June06) from Rs. 644.5 cr
    (June05).
  • Growing Balance Sheet
  • Advances registered a YoY growth of 37.4 to
    reach Rs 77,546 cr at the end of June06 compared
    to Rs. 56,435 cr a year ago.
  • Total Deposits stood at Rs. 1,17,173 cr in
    June06 as compared to Rs. 1,01,303 cr in June05
    showing a YoY growth of 15.7.
  • Improved Asset Quality
  • Gross NPAs as percent of Gross Advances declined
    to 3.98 in June06 from 6.02 in June05.
  • Ratio of Net NPAs to Net advances at the end of
    June was 0.35.

Improved CASA to 48.6 in June06 from 45.6 in
June05
7
  • Performance Highlights
  • Operations Review
  • Income Profitability
  • Focus Area Strategy

8
Credit Growth
  • Advances increased to Rs 77, 546 cr at the end
    of June06, registering a YOY growth of 37.41.
  • C/D ratio increased to 66.18 in Q1 FY07
    compared to 55.71 in Q1 FY06.
  • Major constituents of Total Advances as at 30th
    June06 were
  • Retail Loans 23
  • Agriculture 19
  • SME 16
  • Exports 7
  • Others incl. Corporate/ 35
  • Infrastructure etc
  • More than 60 of total incremental advances
    accounted for by the Retail, Agriculture and SME
    sector.
  • The seven Large Corporate Branches (LCBs)
    account for around 16.6 of Banks net credit at
    the end of June06 compared to 12.8 in June05.

Catering to niche segments through more than 75
Specialised Branches
9
Performance Driver ..Retail Credit
  • Retail advances accounted for 22.9 of Total
    Credit as at June06.
  • Upto Jun06 Retail advances grew 49 (YOY) to
    Rs.18,172 cr..
  • Advances to Traders segment constitute 26 of
    Retail advances and grew by 51 (YOY) to .
  • Loans against Mortgage and Lease rentals
    account for 9 of Retail advances and grew by
    98(YOY)
  • Loans to Housing sector account for 35 of
    Retail advances and grew by 28 (YOY).
  • Gross NPAs in retail advances as a percentage of
    retail advances declined to 1.6 in Jun06 from
    2.2 in Jun05.

27 Hub Spoke models to cater the need of
retail segment.
10
Performance Drivers .. Credit to Agriculture and
SMEs.
  • Agricultural Advances at Rs 15,295 crore
    accounted for 19.1 of the Net Bank Credit
    (National goal 18).
  • As at Jun06 Agricultural advances grew by
    38(YOY).
  • Upto June06 Bank had issued 18.54 lakh Kisan
    Credit Cards (KCCs).
  • Under the aegis of PNB Farmers Welfare Trust, six
    Farmers Training Centres (FTC) have been
    functioning in six states. Process is underway
    for setting up three more FTCs. Additional two
    FTC are under consideration.
  • As on June06, credit to SME accounted for 16 of
    Net Bank Credit
  • Lending to SME registered a YoY growth of 29.7
    at the end of June06 against the envisage annual
    Minimum growth of 20 as per FMs policy package
    on boosting credit to SMEs.
  • Set up 34 specialized branches to cater SME
    sector.
  • Signed a MOU with SME Rating Agency of India
    Limited for providing rating services.
  • Entered into MOU with SIDBI for financing
    projects related to SME sector, service sector
    and development of infrastructure.
  • PNB SME Sahayog Scheme has been launched to meet
    the unforeseen expenditure of SSIs.

National Award for Excellence in Lending to SSI
Sector (2004-05)
11
Improving Asset Quality Prudent Credit Practices
  • Through a well defined Recovery Management
    Policy, Bank has been able to
  • reduce Gross NPAs to Rs. 3162 cr in June06 from
    Rs. 3529 cr in June05.
  • Gross NPA as a percentage of Gross advances
    reduced to 3.98 in June06 from 6.02 in
    June05.
  • Net NPA as a percentage of Net advances stood at
    0.35 as on June06.
  • Prudent Credit Practices have helped in
    maintaining the quality of assets.
  • Well Diversified Credit Portfolio.
  • Implemented various credit risk rating models
    developed internally covering exposures of above
    Rs 0.20 crore. Have developed Segment rating
    approach for exposure below Rs. 0.20 crore.
  • As on 31.03.2006, the bank has rated its entire
    loan portfolio except food credit.
  • Bank has Patented Credit Risk Model- Techniques
    for Risk Assessment of Credit (TRAC).
  • Well established system of Quarterly Review - in
    branches having Preventive Monitoring System
    (PMS) software, quarterly reports being called
    for accounts with limit of Rs. 1 crore and above
    to capture early warning signals

NPA Coverage ratio stood at 91.6 as on June06
12
Deposits
  • PNB accounts for about 5.4 of Systems
    Deposits.
  • Deposits at end June06 grew at 15.7 to Rs.
    117173 cr from Rs. 101303 cr at end June05.
  • Share of Low cost deposits in total deposits
    improved to 48.56 in June06 from 45.56
    in June05.
  • Current deposits grew at 30.7 while Savings
    deposit at 21.1.
  • Savings Current deposits accounted for 67.8 of
    incremental deposits.

SKOCH Challenger Award for Change Management for
the FY06
13
Investment Portfolio
  • As at June06, the investment portfolio was Rs.
    43089 cr. Of this about 85 of portfolio in Govt.
    other approved securities.
  • Of the total investment portfolio as on 31st
    Mar06, 43 was in HTM category while 57 was in
    AFS category. Since then, during the first
    quarter of FY07, the bank has shifted Rs. 6,187
    crore of Government securities from AFS to HTM
    category.
  • Further Rs.3,800 cr. has been reduced from the
    AFS portfolio through Sale of Securities/
    redemption. Thus, the proportion of Government
    securities in HTM categroy has increased to 62.
  • Return on investments was 7.94 as at Jun06

Bonds having coupon of 10 and above accounted
for about 35 of the total Pfolio
14
  • Performance Highlights
  • Operations Review
  • Income Profitability
  • Focus Area Strategy

15
Consistent Profitability Rising income
Operating Net Profit
Income Heads
Operating profit for June06 Excl. loss booked on
Transfer securities from AFS to HTM
16
Performance Analysis for the Q1FY07
17
  • Performance Highlights
  • Operations Review
  • Income Profitability
  • Focus Area Strategy

18
Expanding Frontiers..
  • Process underway for converting London
    representative office into subsidiary. Already
    submitted Draft Application Pack to FSA, London.
  • Application filed with Hong Kong Monetary
    Authority for opening a Branch in Hong Kong.
  • Next month application to be filed with OSFI,
    Canada for setting up subsidiary in Vancouver and
    with MAS, Singapore for setting up Offshore
    Banking Unit in Singapore.
  • Received RBI approval for converting Almaty
    representative office into subsidiary
  • First Indian bank to open full-fledged branch in
    Kabul. Achieved profit in the first year of
    operation of Kabul branch.
  • Representative offices at Dubai Shanghai,
    London and Almaty.
  • Offshore Banking Unit at SEEPZ Mumbai.
  • 140 Authorized branches - 9 Position Maintaining
    Offices.
  • Rupee drawing arrangement with twenty exchange
    houses in Middle East Singapore.
  • Joint Venture with Everest Bank, Nepal
  • Shortly opening an International Service Branch
    in Delhi to cater to centralized remittances in
    India

19
Strategic investments Diversification in
Revenue Streams
  • PNB-Strategic Investments
  • PNB Principal Asset Management Company Pvt Ltd
  • PNB Principal Insurance Advisory Company (P) Ltd
    (IAC)
  • PNB Principal Financial Planner
  • Principal Trustee Company Ltd
  • Strategic Investments made in ARCIL, NCMSL,
    NCDEX, NMCE etc.
  • Joint venture with Asset Care Enterprises
  • Joint Venture with 20 Equity Participation in
    Everest Bank, Nepal
  • During the Q1 FY07, income from Commission,
    Exchange and Brokerage grew by 52.2 to Rs. 243
    crore from Rs. 160 crore.
  • Cash Management Service CMS is operational in
    450 centres spread over major cities of the
    country.
  • MICR Centres Clearing charges from the 17 MICR
    centres allotted to PNB by RBI.
  • Marketing Mutual Fund Products and lnsurance
    products both life and non life.
  • Depository Service providing centralized online
    depository services.
  • To facilitate Government Business, implemented
    online tax accounting system for collection of
    taxes.

20
PNB Prepared for adoption of Basel II
  • CREDIT RISK
  • PNB has already started parallel run for
    Standardized approach w.e.f 1.4.2006.
  • Preparing to adopt Internal Risk Based approach
    for certain asset classes as and when permitted
    by RBI. The Bank has Probability of Default (PD)
    data for 5 years and the result of same are found
    satisfactory..
  • As on 31.03.2006, the bank has rated its entire
    loan portfolio except food credit.
  • MARKET RISK
  • Bank has adopted standardized duration method for
    Market Risk w.e.f 31.03.2006.
  • Banks endeavour is to provide explicit capital
    charge on the basis of VaR model
  • OPERATIONAL RISK
  • Bank prepared to adopt Basic Indicator Approach
    for Operational Risk as prescribed by RBI from
    31.03.2007.

More than 110 year tradition of sound and prudent
banking practices
21
Focus Area-Technology- Key growth Driver
  • Technology Plan in place to make Bank a world
    class banking organisation
  • Centralized Banking Solutions (CBS)- An ambitious
    project of the bank aimed at interconnectivity of
    branches, has been implemented at 2,111 service
    outlets at 544 centres covering 77 of total
    business, to harness the advantage of
    ANYWHERE-ANYTIME BANKING.
  • RTGS system operational in 1,794 branches in 121
    RBI identified centre.
  • Structured Financial Messaging System has been
    installed in 1,264 branches through which
    messages regarding DD advices, TTs and collection
    of bills are being sent.
  • 734 ATMs installed. 18.44 lakhs ATM-cum Debit
    Cards have been issued till June06.
  • PNB has commissioned a Customer Service Centre
    (Call Centre), outsourced to M/s Spanco
    Telesystems and Solutions for providing
    information to customers about their accounts and
    product/services/schemes of Bank round the clock.
  • E-payment projects Bank is participating in
    various e-payment initiatives/projects of
    ministries and government department.

22
Key Investment Points
  • Ranks among the stronger public sector banks,
    with one of the highest Net Interest Margin
    (NIM), spreads and NPA coverage ratio amongst
    peer banks.
  • Large Pan-India network
  • High Share of CASA would help in keeping funding
    costs low.
  • PNB is among the Public Sector Banks to implement
    Back Office Centralization covering key back
    office activities at the branches. Once
    completed it will free up manpower and enable
    branches to focus on customer acquisition/service.
  • Bank revamped its Zonal Structure by creating 7
    new Zonal Offices which to help in better
    business growth furthering our footprint in
    different states.

Golden Peacock Award 2005 for Excellence in
Corporate Governance
23
Key Investment Points
  • Strong technology focus
  • - To leverage on technology and franchise
    to maximize opportunities for cross-selling
  • Prudent Lending
  • Strict compliance to Indian GAAP and regulatory
    requirements No qualification of accounts by
    auditors
  • Strong experience in managing take overs
  • - PNB has taken over 7 banks so far
  • FY 2007 also to witness strong economic growth in
    India
  • - To benefit PNB because of the wide reach
    and customer base.

Punjab National Bank is among Indias top 50 Most
Trusted Brands
AC Nielsen ORG-MARG survey carried out for
Economic Times
24
Disclaimer This presentation is made purely for
information. We have tried to give relevant
information which we believe will help in knowing
the bank. The viewers may use their own judgment
and are advised to make their own calculations
before deciding on any matter based on the
information given herein. While every care is
taken to verify the accuracy of the information
given in this presentation , neither the bank nor
its officials would in any way be liable for any
action taken or not taken by the viewers or the
users of this presentation or any other claims,
losses etc.
Thank You
For further information, contact
arunkaul_at_pnb.co.in
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