Punjab National Bank has been on a roller coaster ride on the bourses recently and the same was apparent on the counter today.

In afternoon trades, the scrip of Punjab National Bank (PNB) jumped up 4.1% to Rs 150 on BSE.

However, volatility marked the counter today as it recovered from the day's low of Rs 139.60 (down 3% over its yesterday's close of Rs 144).

The stock has been recording strong volumes of late  and today it notched up 21.3 lakh shares on BSE by 14:05 IST. Average daily volumes over the year to 9 May 2003 on the counter were around 4.51 lakh shares.

PNB has been a star performer among PSU shares on the bourses, currently trading close to its lifetime high of Rs 154.90 (achieved on 14 May 2003 in intra-day trades). From Rs 40.90 on 21 November 2002, the stock has risen 266% in 6 months to the current Rs 150. Recently, the stock has risen 48% in 20 trading sessions from a low of Rs 100.85 on 23 April 2003 to the current Rs 150.

The latest surge on the counter comes amid expectations that PNB may return capital to the government, which has been a trend among public sector banks of late. Andhra Bank has already returned Rs 50 crore of its capital to the GoI and it proposes to return an additional Rs 50 crore. Similarly, OBC proposes to return Rs 50 crore to the GoI. A return of capital to the government results in lower equity base, thereby boosting the earnings per share of banks.

PNB has improved its loan loss provisioning cover over the last two years from 49% in FY 2000-01 to 70% in FY 2002-03 by using its trading gains to make more provisions.

On account of PNB's presence in the northern agriculture belt, its loan portfolio is focused on agriculture and agri-based industries. The proportion of top rated corporations is low. The bank has started focusing on retail loans. Retail loans, excluding retail trade, account for 10% of total loans.

PNB's deposit mix is better than SBI's, with the proportion of current and savings accounts at 44%. This is on account of its dominance in the northern states of Punjab, Haryana and Uttar Pradesh where depositors are not extremely sensitive to technology and service quality.

PNB will announce its Q4 and full year ended 31 March 2003 results on 26 May 2003.  For 9 months to December 2002, its net interest income stood higher by 26% at Rs 2172.16 crore. Net profit rose 47% to Rs 601.66 crore.

The bank's total deposits as on 31 December 2002 rose by 12% to Rs 66,162 crore, while credit was up by 15% to Rs 37,029 crore. Retail lending increased by 45% to Rs 5,586 crore. The focus has been on housing and traders while the range of product offering in the retail segment has also widened.