punjab national bank the name you can BANK upon

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punjab national bank the name you
can BANK upon!
Performance Highlights Q1 FY07

• Banking Excellence
• since 1895

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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.

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Presentation Structure

• Performance Highlights
• Operations Review
• Income Profitability
• Focus Area Strategy

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Growing Size
(Rs. in crore)
Largest network amongst nationalized banks with
4514 offices
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Financial Indicators
(Rs. in cr)
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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
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• Performance Highlights
• Operations Review
• Income Profitability
• Focus Area Strategy

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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
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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.
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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)
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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
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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
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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
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• Performance Highlights
• Operations Review
• Income Profitability
• Focus Area Strategy

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

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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

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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.

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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
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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.

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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
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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
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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