NEWS & ADVICE : FIXED DEPOSITS
PNB an ideal bank for Long Term investment
By Neelima Shankar
Nov 10, 2009
Print    Email    RSS   

Punjab National bank has recently grabbed the second position in terms of business size. The bank has always been a consistent performer. It has the second largest branch network (4,615 branches) in India.

It follows the basic banking principles of maintaining a high share of low cost deposit, opening new branches and keeping a check on the asset quality. Its low cost deposits were around 38.5 percent in the July-September quarter. Low cost deposits comprise current account and saving account (CASA). Such a huge share of Casa deposits indicates that the bank is using its branch network effectively.

Casa has a direct impact on the net interest margin (NIM) since it is the difference between income from loans and cost of deposits. PNB has maintained a NIM of over 3.5 percent in the past 10 years. Maintaining a 3 percent NIM consistently is very rare in the banking industry. Alongwith HDFC, PNB is the only bank to have achieved this in India.

Last year when the interest rates started rising the cost of the deposits increased thus decreasing the NIMs for most of the banks but PNB was not affected by this and maintained a decent NIM.

The bank's asset quality is the best in the industry. Its NPAs constitute around 0.14 percent of its net advances which is one of the lowest in the industry. The bank has been able to keep a check on its bad loans despite its increasing loan book.

The bank has set up 184 domestic branches in the former half of the financial year. it is important for the bank to keep adding branches in order to maintain its share of Casa deposits.

 


(Comments Posted : 0) Post Your Comments
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
Should you preclose your current FD for...
Plan your tax, don’t evade it
FDs or Equity? Which suits you best?
Fetch higher interest rate on your savings...
Carnival of Indian Personal Finance Blogs #6


Sakeela.CaℒL Giℛℒs In Kharar 0985566O911...
NANGAL: CaℒL Giℛℒ In Una 09855660911 Escoℛt...
Chandigarh@CaℒL Giℛℒ In Rajpura +O9855660911...

NEWS THIS WEEK
Federal Bank launched V connect for its customers Feb 12, 2015
Andhra Bank on expansion mode Feb 11, 2015
Dena Bank earned a profit of 13%. Feb 9, 2015
Banks expected to cut down the rates Feb 5, 2015
RBI kept the rates unchanged Feb 4, 2015
News Archive