Punjab National Bank : April-June Net Profit Up 13% at INR12.46 Billion
07/27/2012| 06:59am US/Eastern
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By Nupur Acharya
MUMBAI--State-run Punjab National Bank (532461.BY) said Friday its first quarter net profit rose 13% from a year earlier, even as it boosted provisions for bad loans.
Net profit for the three months ended June 30 rose to 12.46 billion rupees ($225 million) from INR11.05 billion a year earlier. The core net interest income--the equivalent of revenue for companies in other sectors--increased by more than 18% to INR36.90 billion.
The main drag on the bottom line was provisions for bad loans, which rose 15% to INR10.32 billion.
The bank set aside a larger sum then what is required given the current economic environment, said K.R. Kamath, chairman and managing director of the bank.
Most Indian lenders are boosting their provisions for bad loans, as high interest rates and slowing economic growth are making it difficult for borrowers to repay debt.
The lender's gross bad loans rose to 3.34% of total advances at the end of the first quarter, sharply higher than 2.0% a year earlier and 2.93% at the end of the previous quarter.
Write to Nupur Acharya at nupur.acharya@dowjones.com
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