Analyst Jun08

8/7/2019 Analyst Jun08

1/13

1

the name you can BANK upon!

Performance Highlights Q1 FY09Performance Highlights Q1 FY09

2

PNB - Performance Highl ights Operations Review Focus Area & Strategy

PNB - Performance Highlights Operations Review Focus Area & Strategy


2/13

3

820 23

29

90

0

20

40

60

80

100

SBI &

Associates

Nationalised/

Other PS

Banks

Private

Sector

Banks

Foreign

Banks

Regional

Rural Banks

As at March08 Public Sector Banks

(ie Nationalised Banks + SBI &

Associates) constituted 71% of the

Total Business of the Scheduled

Commercial Banks.

HighestBusiness

LargestBranchNetwork

HighestTotalAsset

170 Scheduled Commercial banksin the Indian Banking System Among the NationalisedBanks (Jun08)

PNB - Indias Leading Nationalised Bank

Overtime the share of the Public Sector banksin total business of banking system haseroded from more than 93% in 1993 to about71% in 2008.

However PNB has been able to maintain itsshare in the total business of banking systemat around 5.0 - 6% during the same period.

4

Net Profit : Rs. 512 Cr (Increase by 20.55 %)

Total Assets : Rs. 206458 cr ( increase by 24.88%).

Total Business : Rs. 287504 cr ( Increase by 20.67%)

Total Deposits : Rs 173074 cr ( Increase by 21.36%)

Net worth : Rs. 12825 cr ( Increase by 18.11%)

Capital to Risk Asset Ratio: 12.96%( Basel II)

Perform ance Highlight s ..Q1 FY09


3/13

5

Growing Size

Highest Asset, Highest Business &Highest Deposits

among Nationalized Banks

(Rs. Crores)

24.88

18.12

23.45

20.67

19.65

21.36

YoYGrowth

(%)

2,06,458

12,825

60,421

2,87,504

1,14,430

1,73,074

Jun08

1,65,319

10,858

48,942

2,38,249

95,640

1,42,609

Jun07

1,99,020Assets

12,318Net Worth

53,992Investments

2,85,959Total Business

1,19,502Advances

1,66,457Deposits

Mar08

6

OPERATING PROFIT

Bank able to post YoY increase of 5.28% in Q1 of 2008-09despite the challenging environment characterized by

Increased preemptions under CRRNo revision in lending ratesAdverse G-sec and equity market conditions

877

933

982

600

800

1,000

Q1 FY07 Q1 FY08 Q1 FY09

(Rs.Cr)

Core Operating Profit (excluding trading income from Treasury)

registered growth of 21.02% to Rs.970 cr. (Jun08) from Rs.801 cr. (Jun07).


4/13

7

NET PROFIT

Net profit registered YoY growth of 20.55%, driven byimproved asset quality and steps taken earlier forderisking the investment portfolio

365

425

512

0

50

100

150

200

250

300

350

400

450

500

Q1 FY07 Q1 FY08 Q1 FY09

(Rs.Cr)

8

(In Rs. Crores)

40065.2893 398 2Operating Profit

110615.1527 531 6-Commission Exchange &Brokerage

42 5

50 8

80 1

13 2

50 9

1301

2862

3795

Apr-Jun07

2049

1957

3564

44 2

1997

5534

12256

16263

FY08

-10.4145 6Non Interest Income

-7.4847 0Provisions & Contingencies

11.051445Net Interest Income

26.213612Total Expenses (excl provisions)

21.084,595Total Income

20.55

21.02

-90.22

YoYGrowth (% )

97 0Operating Profit (ex cl. TradingProfit from Treasury)

13-Net Profit on Sale ofInvestment

51 2Net Profit

Apr-Jun08

Income and Profitability


5/13

9

Provisions & Contingencies

-343-177- Depreciation on Investments

497328- Transfer of securit ies from AFS to HTM

508470Total

15124. Others

2012593. Provisions made toward Incom e Tax

(Includin g FBT & Wealth Tax)

138482. Provision tow ards NPAs (Net)

1541511. Provisions for Depreciation on Investment

(Net)

Jun-07Jun-08

(in Rs. Crores)

10

Key Financial Ratios

1.38

7.25

19.00

341.98

64.98

4.90

8.01

10.36

46.81

3.58

1.15

Mar 08

1.41

8.73

16.09

335.13

53.92

4.78

7.91

10.23

48.45

3.59

1.02

Jun 07

1.46

9.64

15.19

321.65

48.84

4.01

7.48

9.17

47.90

3.85

1.03

Mar07

10.74Yield on Advances (% )

1.00Return on Assets (% )

3.27Net Interest Margin (% )

48.32Cost to Income Ratio (% )

8.08Avg. return on funds (% )

5.26Avg. cost of funds (% )

1.31

7.25

18.15

358.23

65.00

Jun 08

MARK ET VALUATIONS

Return on Equity (% )

P/BV*

BVPS (R s.)

PE*

EPS (Rs.)

* Calculated on the closing price of Rs.471 as on 19thAugust08


6/13

11



12

CREDIT PORTFOLIO

74627

96597

119501

95640

114430

23.5%

29.4%

23.7% 23.3%19.7%

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

M ar '0 6 M ar '0 7 M ar '08 Ju n' 07 J un' 08

R

s

.

C

ro

re

s

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

ADVANCES (LHS) Growth YoY (RHS)

Advances rose to Rs. 1,14,430 Cr. at the endof Jun08 from Rs. 95,640 Cr. at the end ofJun07 , showing aYOY growth of 19.65%.

Seven Large Corporate Branches (LCBs)account for around 22% of Banks net credit

Bank has 10 Mid Corporate Branches(MCBs) & 35 SME branches to cater to midsized and small size business segmentsrespectively.

Outstanding Retail credit (excludingtraders) grew YOY by 16.92% to Rs. 18,893

Cr. as on 30th Jun08 from Rs. 16,159 Cr. as on30th Jun07.

Education loan grew YOY by 62.38% toRs.1187 Cr as at end Jun.08 from Rs. 731 Cras at end Jun07.

CREDIT GROWTH

Average Return on Advances improved to 10.74% as at end Jun08.


7/13

13

Composition of Investment P'folio

Jun'08

Govt. &

Other

App.

Sec.

79.9%

Shares

1.6%Bonds/

Deb.

6.3%

Others

10.9%

Subsi.

& JVs

1.3%

In respect of SLR securities the AFS portfolio has been reducedfrom 44% as at Mar06 to 13% as at Jun08

Reduction in duration/ modified duration of the AFS portfoliofrom 4.37/ 4.19 in FY 06 to 1.85/ 1.73 in June08

As at Jun08, the gross

investment portfolio was Rs.60,421 Cr. Of this about 80% of portfolio in Govt. & otherapproved securities.

During Q1 FY09 Banktransferred Rs. 2105 Cr.securities to HTM category,booking a loss of Rs. 328 Cr.

The Bank proactively managedinterest rate risk & has de-riskedthe portfolio to a large extent.

Investment Portfolio

98% of the Rated Non SLR Bond portfolio is rated A and above

14

Deposits

173074

142609166457

139860119685

21.36%

16.01%

19.02%

16.86%

21.71%

0

20000

40000

60000

80000

100000

120000

140000

160000

180000

200000

Mar'06 Mar'07 Mar'08 Jun'07 Jun'08

(R

s.

C

r..

)

0%

5%

10%

15%

20%

25% (%

)

DEPOSITS (LHS) Growth YoY (RHS)

PNB accounts for around5.0% of Systems Deposits.

Deposits at end Jun08 grewat 21.36 % to Rs. 1,73,074 Cr.From Rs.1,42,609 Cr at endJun07.

Share of low cost Current andSavings deposits (CASA) intotal deposits stood at 41.31%

as at Jun 08.Average Cost of Deposits ason Jun08 was 5.88%

Renewed focus being givento increase CASA.

DEPOSIT GROWTH

Deposit Constituents

Fixed

59%

CASA

41%


8/13


9/13

17

Capital & Financial Ratios

5.88

10.74

3.99

8.30

12.29

Jun08

5.46Avg. Cost of Deposits

Financial Ratios (% )

3.25Tier II

10.23Avg. return on Advances

9.16

12.41

Jun 07

Capital to Risk AssetsRatio (%) (As perBasel I)

Tier I

Share holding pattern -30th June2008

Govt. 57.80

MF &UTI, 4.84

FIs/Banks, 0.13

Non

institutions,

5.63

FII , 19.83

Insurance Co. ,

11.77

Comfortable Capital Adequacy Ratio

Strengthening Capital Ba se well above the regulatory requirem ent. As per theBASEL II , CRAR is 12.96 (Tier I- 8.87%) as at end Jun-08.

18




10/13

19

100% Computerization of all branches.

CBS implemented at 4000 SOLs across 18 centres covering morethan 91% of Total business

RTGS has been implemented at 3347 branches. PNB is the FirstPublic Sector Bank to offer RTGS through Internet Banking.

NEFT has been implemented at 3347 branches. PNB is the FirstBank to launch NEFT

SFMS has been Implemented in 1395 branches for intra bankfunds transfer

Bank has 1581ATMs.

Online Share Trading: The customers can trade through thisfacility and subscribe to IPOs, Mutual Funds, debt instrumentsetc.

Centralisation of Back end Operations:To leverage Core BankingSolution technology across the Bank. Back end operations arebeing taken out of CBS branches and centralized at city/nationallevel.

Technology Initiatives .

Bank introduced Mobile ATMs to reach out to unbanked slum/ruralareas

20

Opened branch at Hong Kong in December 2007.

Bank upgraded its Representative Office at London (UK) into awholly owned subsidiary called PNBIL. Profitable in its first year ofoperations.

First Indian Bank to open branch in Kabul. Branch becameprofitable in the first year of operation.

Bank has Representative Offices atAlmaty (Kazakhstan), Shanghai(China) & Dubai (UAE)

Bank has an equity stake in Everest Bank in Nepal

Process underway for opening

Representative Office at Norway

Subsidiary at Canada

Upgrading RO Shanghai into branch

Offshore banking unit at Singapore

Branch at Dubai International Finance Centre

Joint Venture in Bhutan

Global Presence


11/13

21

Reaching OutTapping future growth potential

Catering to niche segments through 109 Specialised Branches

Financial Inclusion: More than 49% of population financiallyexcluded offers immense opportunity to bank.

Bank opened more than 7.68 lac No Frills Accounts

Bank using Biometric Technology and Smart Card proposes to Cover

30,000 villages, 75 milion people by 2010.

Pursuing financial inclusion both at geographical & functional levels

Geographical : Bank launching technology enabled financial inclusionthrough Business Correspondents/ Business Facilitators FinancialInclusion Model on Pilot basis at 27 identified sites (20 in rural +7 inurban) and would replicate it later in other places.

Functional : Comprehensive scheme covering finance, insurance (health

and life) launched for rickshaw pullers, project for empowering womenweavers, vegetable vendors etc.

Focus on microfinance / SHGs

22

Strategic Investments/All iances/ Joint Ventures 100% subsidiary in the form of a housing finance company

PNB Housing Finance Limited

Majority owned listed subsidiary PNB Gilts Limited which is aleading primary dealer

In India, the bank has strategic investments in:

Leading mutual funds and asset management companies

Trustee Companies

Asset Reconstruction company

Overseas Joint Venture Everest Bank Limited in Nepal

In addition, the Bank has sponsored (alongwith GoI and StateGovernments) six Regional Rural Banks (RRBs) in six of itskey states.


12/13


13/13

25

PNB A SNAPSHOT

Asset QualityAsset Quality

OwnershipOwnership

CapitalizationCapitalization

MarketPosition

Market

Position

3rd largest bank in India w ith Pan India P resence & predominant presence inthe fertile Indo Gangetic belt, thereby enabling it to capture 16-17% of

business in the region Franchise value supported by very large customer base, second largest

branch network in the country and a long history of operation

3 rd largest bank in India w ith Pan India P resence & predominant presence inthe fertile Indo Gangetic belt, thereby enabling it to capture 16-17% of

business in the region Franchise value supported by very large customer base, second largest

branch network in the country and a long history of operation

Relatively strong asset quality Strengthening risk management systems

Continually declining gross NPA ratio and net NPA consistently below 1%

Relatively strong asset quality Strengthening risk management systems

Continually declining gross NPA ratio and net NPA consistently below 1%

58% Government-owned, with significant oversight through Boardrepresentation

58% Government-owned, with significant oversight through Boardrepresentation

Strengthening capital adequacy ratios through internal accruals and byaccessing to capital markets

Continuous increase in Tier I capital

Improving Capital Adequacy at 12.96% (June 2008) comfortably above the

minimum requirement

Strengthening capital adequacy ratios through internal accruals and byaccessing to capital markets

Continuous increase in Tier I capital

Improving Capital Adequacy at 12.96% (June 2008) com fortably above the

minimum requirement

One of the healthiest Low cost current account savings account ratio (CASA)ratio of 41.31%

Highest rating by all four domestic rating agencies and one of the few banksto enjoy a AAA rating on its perpetual debt issue

One of the healthiest Low cost current account savings account ratio (CASA)ratio of 41.31%

Highest rating by all four domestic rating agencies and one of the few banksto enjoy a AAA rating on its perpetual debt issue

ProfitabilityProfitability Higher than industry NIM due to a combination of improving yields and low

cost funding base

Higher than industry NIM due to a com bination of improving yields and lowcost funding base

FundingFunding

Market riskMarket risk Book substantially derisked with reduced duration/ m odified duration and

less proportion of AFS

Book substantially derisked with reduced duration/ m odified duration andless proportion of AFS

26

Thank YouDisclaimer

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.

Documents

Analyst Jun08