Punjab National Bank is one of the leading PSU bank , which has the distinction of first Indian bank to have been started solely with Indian capital.Positives
..Dominant player in the Indo-Gangeticplain, which is economically well-off.
..Strong liability franchise with around 39% of CASA (low cost deposits)
..Among few banks in PSU space having strong growth in fee income.
..Asset quality has improved significantly in last 2-3 quarters.
..More than 4000 branches on CBS platform, covering around 99% of its total business.
Risks
..Ripple effect of financial crisis in US & Europe
..Downside risk arises from hard-landing of our economy
..Deterioration in the asset quality, if any, would require higher provisioning.
At current price of around Rs.400,the stock trades price to book of less than one and 6 times FY09 earnings. Long term investors can accumulate on declines,for good returns.