However, according to a PNB press release, the net profit in the previous year (1997-98) included Rs 216.56 crore (net of taxes) on account of an extraordinary item of write back of excess depreciation on approved securities. It added that "exclusive of this item from the net profit of previous year, the growth in the net profit works out to be 42.7 per cent".

As far as gross profits were concerned, the PNB recorded an increase of 2.5 per cent during the year. The gross profits during the year totalled Rs 821.27 crore. It was also pointed out that excluding the provision of Rs 80 crore towards proposed wage revision, the gross profits would work out to be Rs 90.27 crore representing a growth of 12.5 per cent.

The bank release also stated that due to depressed market conditions there was a decline in profit on sale of investments from Rs 237 crore to Rs 79crore during 1998-99. As a result, non-interest income declined by Rs 92 crore. However, commission, exchange and brokerage increased from Rs 280 crore to Rs 328 crore registering a growth of 17.2 per cent as compared to 12.8 per cent in the previous fiscal.

Total expenses continued to show deceleration and grew by only 9 per cent during the year compared to 9.3 per cent during last fiscal. While the interest expanded showed a slower growth rate of 3.6 per cent during 1998-99 compared to 10.7 per cent previously, growth in other operating expenses was higher at 21.9 per cent compared to 6 per cent in the previous year mainly on account of provision of Rs 80 crore for proposed wage revision.

The press release added that despite fall in interest rates and increasing strain on interest margin, net interest margin of the bank improved from 3.25 percent during 1997-98 to 3.57 per cent during 1998-99.

PNB's capital and reserves at the end of March 1999 increased to Rs 1929.75 crore compared to Rs 1,754.14crore during the previous financial year registering a growth of 16.7 per cent. Despite the return of equity of Rs 138.33 crore to the government during 1997-98, bank's capital to risk asset ratio (CRAR) at the end of 1998-99 increased to 10.79 per cent from 8.81 per cent previously.

Total income during the year rose to Rs 4,993 crore registering a growth of 7.9 per cent interest income as per cent to working funds showed an improvement and at the end of fiscal stood at 10.03 per cent up from 9.98 per cent previously.