PNB reports ₹507 cr net profit in July-September quarter
Gross non-performing assets declined from 16.76% in July-September from 17.16% a year ago while net NPA was down to 7.65% from 8.90% a year agoPNB’s provisioning coverage ratio increased to 73.58% as of September-end, from 66.9% a year ago
NEW DELHI : State-owned Punjab National Bank (PNB) on Tuesday posted a net profit of `507.05 crore in the quarter to September against a `4,532.35 crore loss a year ago on the back of a decline in provisioning for bad loans.
However, the lender posted a higher profit of ₹1,018.63 crore in the preceding three months. “In June-end we had over ₹1,000 crore profit. If you look at the segments where fraud has been declared, there was a requirement of provisioning to be done. That’s why there has been a change in profitability. But still, considering the amount of provisioning that we have done, it has been a good performance," said S.S. Mallikarjuna Rao, managing director and chief executive of PNB.
Provisions during the quarter ended September declined by 58.5% year-on-year to ₹3,055 crore.
Gross non-performing assets (GNPA) declined from 16.76% in July-September from 17.16% a year ago while net NPA was down to 7.65% from 8.90% a year ago. PNB’s provisioning coverage ratio (PCR)—the amount set aside to cover NPAs—increased to 73.58% as of September-end, from 66.9% a year ago.
However, fresh slippages grew by two-third to ₹7,462 crore in July-September. The major contribution to the fresh slippages was from 10 corporate accounts, including those of Jet Airways and Suzlon.
“Agriculture ( ₹632 crore), retail ( ₹498 crore), MSME ( ₹1,506 crore)—these are the three RAM (retail, agriculture, MSME) accounts and others are ₹4,786 crore. This is the composition of ₹7,462 crore of total slippages."
He further said the lender’s exposure to beleaguered Dewan Housing Finance Corp. Ltd (DHFL) is over ₹1,000 crore.
The bank’s operating income grew 14.9% to ₹6,529 crore from ₹5,684 crore a year ago.
PNB expects the credit growth to be 8-10% by March 2020. The bank’s retail credit grew 18% to ₹96,457 crore in July-September from ₹81,198 crore a year ago.
Net interest margin (NIM), a key measure of profitability, was 2.39% in the quarter ended September compared with 2.46% a year ago.
Rao expects NIM to hover around 2.4% by year-end. Net interest income—the difference between interest earned and interest expended—increased 7.3% to ₹4,264 crore.
On Tuesday, shares of PNB ended at ₹64.60 on the National Stock Exchange, down 5.28% from the previous close.
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