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PNB back in black with Rs 1,018.6 cr profit in Q1; but gross NPA rises to 16.49%

Its net NPA was at 7.17% against 6.56%, QoQ while gross NPA at 16.49% against 15.50%, QoQ.

July 26, 2019 / 03:08 PM IST
 
 
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Punjab National Bank (PNB) is back in the black after posting a profit of Rs 1,018.6 crore in June quarter, compared to a loss of Rs 940.01 crore in the year-ago period and loss of Rs 4,749.64 crore in the previous quarter. The strong Q1 show was driven by a sharp fall in provisions, although asset quality has deteriorated further.

The public sector lender has beaten street expectations definitely, as a poll conducted by CNBC-TV18 estimated loss IN Q1 at Rs 201 crore. At the time of publishing this copy, shares of PNB were up 2.5 percent on the BSE, primarily driven by better-than-expected bottomline numbers.

Net interest income tumbled 11.7 percent to Rs 4,141.4 crore compared to the previous year with tepid loan growth of 1.55 percent YoY.

Provisions at the end of June quarter stood at Rs 2,023 crore, falling significantly by 80 percent compared to the previous quarter and 65 percent compared to Q1FY18.

Provision coverage ratio improved marginally to 74.63 percent in Q1FY20, from 74.5 percent in Q4FY19. But asset quality weakened further sequentially. Gross non-performing assets (NPA) as a percentage of gross advances in Q1 increased 99bps to 16.49 percent and net NPA as a percentage of net advances rose 61bps to 7.17 percent compared to March quarter.

"We expect to bring gross NPAs below 12 percent by the end of the year and FY20 will be a year of profitability for the bank," said Sunil Mehta, MD & CEO while addressing a press conference after the earnings announcement.

He further added that the bank is not looking at distress sale of non-core assets and will go in for sale of non-core assets when market conditions are right.

"Our exposure to troubled non-banking finance companies is very low. We will provide provisions for Bhushan Steel as per regulatory requirement and the account is in an advanced stage of resolution," Mehta added.

PNB reported fresh slippages for June quarter at Rs 4,711 crore, which were lower compared to Rs 6,710 crore posted in the previous quarter. Hence, annualised fresh slippage ratio declined to 4.47 percent against 5.86 percent on sequential basis.

Other income (non-interest income) grew by 6 percent year-on-year to Rs 2,075 crore, but operating profit fell 17 percent to Rs 3,481.4 crore in quarter ended June 2019.

Moneycontrol News
Tags: #Results
first published: Jul 26, 2019 01:40 pm

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