Mr. P.K Anand, Executive Director, Punjab and Sind Bank, came on board on December 7, 2009. He holds a bachelors degree in commerce from the University of Delhi and a Masters Degree from Allahabad University. P.K Anand has 33 years of experience in the gamut of banking and finance sector. He has earlier worked with Allahabad Bank as a General Manger. The Punjab & Sind Bank was founded in 1908 in Amritsar, with a principle of social commitment to help the weaker section of the society in their economic endeavours to raise their standard of life. Punjab & Sind Bank was founded with the far-sighted vision of luminaries like Bhai Vir Singh, Sir Sunder Singh Majitha and Sardar Tarlochan Singh. Decades have gone by even today Punjab & Sind Bank stands committed to honor the social commitments of the founding fathers. The Bank envisions emerging as a strong vibrant Bank through synchronization of the human, financial and technological resources. This was one of the six Nationalised Bank in 1980. Speaking with Jasmine Kohli ofIIFL, PK Anand says We plan to moderate our credit growth; we are growing at 38% yoy for the last five year. Brief us about your IPO? The IPO is for 40 mn shares and it is a fresh issue of shares and there is no government divestment and the entire proceeds of the IPO will go to the bank for augmenting its resources in the form of Tier I Capital, the issue will constitute 17.93 of the post issue capital and post issue the government will continue to own 82% of the banks. The price band has been fixed at Rs 113 Rs 120 per share. The issue will open on Dec 13 and will close on Dec 16. How much are you raising in at the top end of your price band? We are raising about Rs 4.75bn at the top end. Your bank is moving to lower credit growth, please explain. We plan to moderate our credit growth; we are growing at 38% yoy for the last five year. On the Fee based front we are very bullish; we have launched banccasurance, we have started selling of gold coins. Loan syndication has been stared on a small scale. What is the banks NPA levels? We were among the lowest NPA levels in the public and private banking industry domain. We had our net NPA of 0.36, which was also one of the lowest in the industry. Going forward, we believe we will be able to maintain the tempo and the growth. Maybe, there will be some moderation in credit book so that we concentrate more on improving our Net Interest Margins (NIM), Current Account and Saving Account (CASA), Return on Assets (ROA) and creating value for shareholders and stakeholders. Brief us about the amount of loans restructured? The total restructured loans amounts to Rs 9.71bn which comprises 2.7% of the total loan assets. The banks business grew at CAGR of 32% during the FY05 to FY10. Tell us about NIMs? Your expansion plans in terms of branches? Our NIM is at 3% annualised as on half year. ROA is 0.98% on Sept 30 and the net profit has grown over five years at 36.5% yoy for the whole year. We were at Rs 5.08bn. For the half year it is Rs 2.76bn. Further, if we are going to fund our growth then it would be through more of CASA. We believe that bank will be able to have very healthy efficiency ratios in future and the bank is in an expansion mode and we are opening branches, we are installing ATMS and our Core Banking Solution systems (CBS). For the future we will try to maintain our NIM at 3%. What would be the thrust area for Punjab and Sind Bank? CASA improvement is one the focus areas, for which we have branch expansion in place. We are growing the hinterland and also have performance-based incentive scheme in place. We are predominantly a North Indian Bank and our network comprises 926 branches and 63 ATMS as on Oct 31, 2010. Rural branches are 327, Semi-Urban 127, Urban 295, and Metropolitan 153. 68% in North India comprising of Punjab, NCR, Delhi, Western U.P and Haryana, Central accounts for 20%, Eastern accounts for 6% western accounts for 4% and Southern accounts for 2%. Any branch license application pending with the RBI? We have applied to the RBI for licenses and at the same time RBI also allows us to open more branches in Tier II and Tier VI cities. So we have identified some potential areas in Tier II and VI cities. We are opening branches aggressively What growth are you seeing in deposit rates? Deposits of the bank grew at a CAGR of 28.2%. Advances have grown at 36.24% yoy. The total business size of the bank is Rs 880bn. Any revision in deposit rates on cards? Our ALCO meets every fortnight, so some tweaking is taking place in deposit brackets. For advances, another review falls this quarter, so base rate will be due for the review. There appears to be an upward bias on lending rates as well. What is your take on lowering interest rate on lending rate and increasing rates on deposits? There is scope for that but operational efficiency needs to improve and for that the technology has to be leveraged to the full extent. Further, it has to be supplemented by fee income component; unfortunately, the fee income is not high in our bank. It is around Rs 3.92bn.
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