Since the issue involved relates to the interpretation of the law and is sub-judice before Securities Appellate Tribunal, Punjab National Bank has decided to await the tribunal's order on PNB Housing Finance
Punjab National Bank (PNB) is waiting for the Securities Appellate Tribunal (SAT) order on PNB Housing Finance (PNBHF) stake sale and will abide by the judgement whatever it comes, said the bank chief SS Mallikarjuna Rao on Tuesday.
Taking about the deal, Rao said that it is a matter of interpretation of the law which can be put through only by the judiciary. He said the decision taken by PNB Housing Finance was within the Issue of Capital and Disclosure Requirements (ICDR) Regulations of SEBI.
"Division is not in violation of ICDR. It clearly indicates the adherence to Securities and Exchange Board of India (SEBI) guidelines. Prior to going to the transaction with the Carlyle Group, we sought approval for the rights issue. PNB continues to hold 32 per cent of stake," he said.
Defending the board members of PNBHF, the PNB chief said that board directors have great expertise and reputation and companies request them to come on board because of their expertise and reputation, and their integrity cannot be questioned.
Notably, the shareholders of PNB Housing on June 22 voted on a special resolution for a preferential allotment of shares to Carlyle and other investors. The parties to the deal are PNB and private equity firms Carlyle, General Atlantic, and Ares SSG, which own a combined 85 per cent stake in PNB Housing.
However, SEBI halted the stake sale and asked PNBHF to conduct an independent valuation before pricing any capital-raising deal.
PNB Housing said that after discussing the matter, its board, in a majority resolution passed on 6 July, decided that since the issue involved relates to the interpretation of the law and is sub-judice before SAT, the company will await the tribunal's order on this issue.
Talking about the Q1 result which ended on June 30, Rao said that the net profit of PNB improved by 232.1 per cent to ₹1,023 crore in Q1 FY'22 from ₹308 crore in Q1 FY'21.
He informed that banks operating profit has also Y-o-Y grew by 15.5 per cent to ₹6,099 crore.
"Global Net Interest Margin improved by 23 bps to 2.73 per cent in Q1 FY22 from 2.50 per cent in Q1 FY'21. Gross Non-Performing Assets (GNPA) stood at ₹1,04,076 Crore as of June'21 as against ₹1,01,849 Crore in June 2020. Net Non-Performing Assets (NNPA) stood at ₹38,581 Crore as of June'2021 as against Rs. 35,303 Crore in June'20," informed the PNB Chief.
Rao further informed that PNB will close 1000 branches by December 2021 and will use these licenses to open branches in places where the bank is not present.
He said that PNB expects retail slippages to moderate in coming quarters. "We expect stress to remain elevated in MSME. Stress will moderate by Q4. Expect NPA to moderate and go down in the next couple of quarters, but the MSME sector will take some time to recover," he added.
This story has been published from a wire agency feed without modifications to the text.
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