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Higher provisioning and worsening asset quality dented Punjab National Bank’s third quarter bottomline performance. Net profit during the quarter came in at ₹51 crore, down 93.4 per cent over the ₹775 crore reported in same quarter last fiscal.
The bottomline performance for the quarter under review was bolstered by tax write-back of ₹909 crore.
This public sector lender had reported a net profit of ₹621 crore in the second quarter this fiscal. Total income in Q3 grew 7.64 per cent to ₹13,891 crore (₹12,905 crore), and operating profit rose to ₹2,918 crore (₹2,751 crore).
Usha Ananthasubramanian, Managing Director & CEO, PNB, said that the clean-up of bad loans in bank’s balance sheet has begun, but the pain may not yet be over. There is every possibility of asset quality pain continuing in the fourth quarter, she added.
“The Q3 performance from the operating profit point of view has been robust. Internally, PNB is a robust bank while we have to externally carry this pain. This quarter has been very bad for assset quality,” she said.
Provisions in the quarter nearly doubled to ₹3,775 crore (₹1,882 crore). She said slippages during the third quarter stood at ₹13,482 crore, which were mainly contributed by the infrastructure sector, especially steel and power,.
For the current fiscal, the guidance for net interest margin is between 2.6 and 3 per cent.
Capital mop-up PNB is currently in talks with the Centre for infusion of more Tier-I capital, she said. The bank had recently raised Tier-II bonds of ₹ 1,500 crore, she added.
In the third quarter, PNB’s capital adequacy ratio stood at 11.25 per cent as against 12.2 per cent in previous quarter.
Gross non-performing assets (NPAs) climbed to 8.47 per cent in third quarter as against 6.36 per cent in previous quarter. Net NPA stood at 5.86 (3.99 per cent in previous quarter).
In absolute terms, gross NPA rose 38 per cent at ₹34,338 crore in third quarter as against ₹24,945 crore in previous quarter. Net NPA jumped 51.3 per cent at ₹22,983 crore (₹15,187 crore).
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