Punjab & Sind Bank (PSB), on Saturday, reported a 25.36 per cent decline in net profit for the first quarter at ₹153 crore.
The bottomline performance was weighed down by an increase in provision for bad loans at ₹66 crore (₹27 crore).
Also read: Punjab & Sind Bank plans to open 40 new branches this fiscal: MD & CEO Saha
Total income for the quarter under review grew 30 per cent to ₹2,494 crore. Operating profit was marginally higher at ₹257 crore (₹252 crore).
It maybe recalled that PSB had in the March 2023 quarter recorded net profit of ₹ 457 crore.
For the entire fiscal year 2022-23, PSB had recorded a highest-ever net profit of ₹1,313 crore, up 26.37 per cent.
Commenting on the first quarter financial performance, Swarup Kumar Saha, Managing Director & CEO, said that the fall in profits was only a blip and that the bank expects to sustain the bottomline performance of last fiscal in the current fiscal.
“We will catch up on the bottomline front in subsequent quarters. We have set for ourselves an overall recovery target of ₹ 1,500 crore for the current fiscal. We are confident of meeting this and this will help bolster our overall bottomline performance for current fiscal”, Saha said.
Reasons for dip
There are two to three reasons why the bank’s profits dipped in the current quarter, he said. Saha said that bank had to recognise a mid corporate account (logistics provider) — which was a restructured account— with an exposure of ₹92 crore as a NPA in the quarter under review and this had led to an additional provisioning of about ₹42 crore.
Also, PSB had in the current quarter decided to provide upfront ₹57 crore towards wage revision. Moreover, recovery from the technically written-off account in this quarter was about ₹ 10 crore, much lower than ₹60 crore in same quarter last fiscal.
Saha also said that bank would in this fiscal set up a mutual fund distribution platform in partnership with a fintech. This digital-only initiative would go live in the fourth quarter of this fiscal and is expected to bolster the fee income of the bank in the coming days, he added. “This foray into MF distribution digitally will also help improve stickiness of our customers. It will be a game changer for the bank as it will enhance our brand value”, Saha added.