Punjab National Bank dropped 1.80% to Rs 396 at 10:16 IST on BSE after the bank said on Saturday, 28 June 2008 it has raised its benchmark prime lending rates by 50 basis to 13% per annum with effect from 1 July 2008.
The bank made this announcement on Saturday, 28 June 2008.
Meanwhile, the BSE Sensex was down 22.81 points, or 0.17%, to 13,779.41.
On BSE, 10,531 shares were traded in the counter. The scrip had an average daily volume of 1.51 lakh shares in the past one quarter.
The stock hit a 52-week low of Rs 395.20 in the counter so far during the day. The stock hit a high of Rs 406 so far during the day. The stock had a 52-week high of Rs 721 on 3 January 2008.
The mid-cap bank stock had underperformed the market over the past one month till 27 June 2008, declining 19.46% compared to the Sensex’s decline of 15.41%. It had also underperformed the market in the past one quarter, declining 23.60% compared to Sensex’s decline of 15.69%.
The bank has an equity capital of Rs 315.30 crore. Face value per share is Rs 10.
The current price of Rs 396 discounts its Q4 March 2008 annualised EPS of Rs 68.98, by a PE multiple of 5.74.
The bank has also increased interest rates by 50 basis points on housing loans, car loans and personal loans. It also decided to increase its deposit rates ranging from 25 basis points to 50 basis points in some of the time slabs.
Punjab National Bank (PNB) raised lending rates after the Reserve Bank of India (RBI) gave a strong signal that interest rates in the economy are headed north when it on Tuesday, 24 June 2008, raised repo and cash reserve ratio (CRR) by 50 basis points each on control over 11% inflation.
The double-stroke anti-inflationary measures are expected to tighten the liquidity in the system, as the CRR hike would suck out around Rs 16,000 crore. CRR is the proportion of deposits mobilised by banks and parked with the RBI for statutory requirement. Banks do not earn any interest on the cash reserves. Repo rate is the rate at which RBI lends money to banks.
PNB’s net profit rose 128.8% to Rs 543.76 crore on 19% increase in operating income to Rs 4417 crore in Q4 March 2008 over Q4 March 2007.
The state-run bank provides treasury and banking operations. The activities include accepting deposits, lending loans and to provide other financial related services.