PNB Q1 profit falls 57% to Rs306 crore
In the June quarter, PNB's net interest income contracted to Rs3,699 crore
New Delhi: Punjab National Bank’s net profit fell 57% to ₹ 306 crore in the first quarter of 2016-17 from ₹ 720 crore in the year-ago period as bad debts zoomed.
Gross non-performing assets (NPAs) of the bank as a percentage of advances more than doubled to 13.75% from 6.47% in the year-ago period. Net NPAs also touched 9.16% from 4.05% in the year-ago quarter.
The NPA ratios have increased even when compared to the preceding quarter when the bank had reported a record loss of ₹ 5,367 crore, hit by the sharp increase in bad debts and need for greater provisioning. Gross NPAs were at 12.9% and net NPAs at 8.61% in the quarter ended March.
In the April-June quarter, provisions other than for tax increased to ₹ 2,738 from ₹ 1,811 in the year-ago period.
All banks were forced to clean up their books—make higher provisioning and classify more loans as bad debts—after the Reserve Bank of India mandated it following an asset quality review. As a result, most of the state-run banks reported losses in the March quarter.
In the quarter, PNB’s net interest income contracted to ₹ 3,699 crore from ₹ 4,102 crore in the year-ago period. Other income also fell to ₹ 2,355 crore from ₹ 1,397 crore.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!