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Showing posts from December, 2010

Punjab National Bank

PNB has corrected sharply since its Q2FY11 results due to spike in slippage and due to loan scam along with rise in concerns over microfinance & 2G/3G lending by the banks (especially PSU banks).
It is better placed than its peers in rising interest rate environment with its strong liability franchise (CASA mix at ~41%) along with lower dependence on wholesale deposits.

Reported NIM for H1FY11 is ~4.0%, again on the higher side vis-à-vis its peers. This has come on the back of sequential improvement in yield on advances (31bps QoQ; driven by increase in PLR and base rate during Q2FY11) and containment of cost of deposits (due to better liability management).

the correction in stock price seems to be overdone and hence long term investors can buy this stock with a price target of Rs.1400.