Punjab National Bank spurted on Wednesday to touch its new all-time high of Rs 90.10, following sustained buying support from institutions.

By 14:35 IST, the scrip of the state-run bank slipped from its higher levels, but was still up by 5.49% at Rs 89.30 on the BSE. Over 1.15 million shares changed hands on the counter. In the last 10 months, the scrip has risen by 158% from Rs 34.90 on 29 April 2002.

As per market buzz, Alliance Capital was an active buyer on the counter.

Dealers said there was almost across-the-board buying spree on the PNB counter, following hopes of good future growth prospects.

The rise in the PNB scrip was also on reports that the government may raise the cap for foreign institutional investors in public sector banks to 49%, from the current 20%. An announcement to this effect is likely to be made in the Union Budget for 2003-04, which is scheduled on 28 February 2003, as per the reports.

Meanwhile, analysts are optimistic over the growth prospects of public sector banks following the enactment of the Securitisation Act. Banks have already started serving notices to defaulters and in some cases have even seized assets.

Earlier, PNB came out with its initial public offer of 5.30 crore shares at Rs 31 per share on 21 March 2002. The issue was oversubscribed by 4.4 times. ICICI Securities, DSP Merrill Lynch, SBI Capital and Kotak Mahindra Capital were lead managers to the issue.

Subsequently in April 2002, Punjab National Bank got listed on three exchanges - Bombay Stock Exchange, National Stock Exchange and the Delhi Stock Exchange.

Last month, PNB announced that it has merged its operations with the Kerala-based Nedungadi Bank, thus paving the way for the New Delhi-based bank's expansion in the southern state.

The 108-year-old PNB is among the oldest professionally managed institutions in the Indian banking industry. It has one of the largest domestic branch networks (4,262 branches as on 31 December 2001) in the country, including 3,861 branches and 401 extension counters . Of these, 365 branches have been awarded the ISO 9002 certification. This vast domestic network of branches offers the bank a very low-cost deposit base.

PNB has been servicing its customers by offering a gamut of financial products in retail and corporate banking, industrial finance, agricultural finance, financing of trade and international banking.

The bank has appointed international consulting firm Boston Consulting Group to help it in restructuring of operations. It is implementing recommendations of BCG in the areas of organisational structuring, credit and treasury functions, realignment of branches, retail and office control functions.

PNB has widened its product portfolio by venturing into new business areas like gold dealing, insurance and credit cards. Its subsidiaries provide services relating to capital market, housing finance, asset management and government securities.

PNB posted a 133% jump in Q3 (ended 31 December 2002) net profit to Rs 189.25 crore (Rs 1.89 billion) on a 25% growth in net interest income to Rs 733.60 crore (Rs 7.33 billion).

As on 31 December 2002, the government held 80% equity stake in PNB, while the public and domestic institutions held 10.6% and 7.33% respectively.