Saturday, September 12, 2009

Buy Punjab National Bank

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Apart from robust growth in fund-based income, the bank’s other income (which includes more stable fee-based income) has grown at a healthy pace. While an extensive branch network should continue to aid PNB to deliver robust business growth, the relatively high CASA ratio should ensure better NIMs, compared to its peers. The technology initiatives (100% CBS implementation) along with prudent lending practices would also help towards keeping costs under check and maintain asset quality.

While PNB also holds 74 per cent in PNB Gilts and 30 per cent in Principal PNB Mutual Fund, any progress over the IPO of UTI AMC (PNB holds 25 per cent stake) could rub off positively on the stock.