Punjab National Bank hit its all-time high of Rs 154.90 early on Wednesday, and is still trading strong after easing a little.

By 11:15 IST, the scrip of the large public sector bank was firmly higher at Rs 146.95, up 7.58%. It had struck a day's low of Rs 136 earlier. Volumes on the counter were at over 13.38 lakh shares by 11:15 IST. The scrip has now risen 292% from Rs 37.50 (on listing) on 26 April 2002.

Banking stocks on the whole are upbeat for more than one reason, including strong financial prospects. For PNB, in particular, reports that the company is in the process of reducing its capital by returning equity to the government has also been a vindicating factor in the stock market. If the capital reduction does take place, PNB's fundamental strength will be boosted.

The Securitisation Act, which was passed in Parliament in November 2002, has provided the first major impetus for banking stocks recently. Banks have since started serving notices to defaulters and in some cases have even seized assets.

PNB had come out with its initial public offer of 5.30 crore shares at Rs 31 per share on 21 March 2002. The issue was oversubscribed 4.4 times.

Subsequently (in April 2002), PNB got listed on three exchanges - the Bombay Stock Exchange, the National Stock Exchange and the Delhi Stock Exchange.

Recently, PNB 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 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, government securities, etc.

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 March 2003, the government held 80% equity stake in PNB, while the public and institutions held 8.63% and 9.79%, respectively.