Punjab & Sind Bank (PSB) on Monday reported a net profit of ₹301 crore for the third quarter ended December 31, 2021. This is higher than the net profit of ₹218 crore recorded in the second quarter this fiscal and net loss of ₹2,376 crore recorded in the third quarter last fiscal. 

This is the fourth straight quarter when the public sector bank has recorded a profit and is on course to sustain its performance in the coming quarters as well, S Krishnan, Managing Director & CEO, PSB, told BusinessLine post the board meeting to consider the Q3 results. The latest quarterly bottomline is probably the highest ever the bank has recorded, Krishnan added.

‘Shock absorbers’

Not only has the bank effected a strong turnaround, it has now built enough “shock absorbers” to cope with any future pain, Krishnan added. It may be recalled that PSB had recorded a net profit of ₹161 crore for the fourth quarter ended March 31, 2021 and this was the first quarterly profit for the bank after eight consecutive quarters of net losses. In the first quarter this fiscal, PSB had recorded net profit of ₹174 crore. 

Krishnan said that PSB’s turnaround has been aided by performance improvement across all areas, including increase in interest income and reduction in cost of deposits. Also, yields on advances has gone up to 7.69 per cent and the net interest margin has gone up to a healthy 3.17 per cent.

“We are also focused on strengthening the balance sheet. We have also front-loaded certain provisions to strengthen provision coverage ratio which has gone up to 87.77 per cent, which has brought down net NPA,” he said.

Krishnan also noted that the bank has not resorted to any technical write-off of bad loans and gross NPA has come down to 14.44 per cent from 14.54 per cent. The net NPA has come down to 3.01 per cent from 3.81 per cent. He highlighted that the bank would continue to reduce its exposure to the corporate sector, while improving the lending to retail segment (RAM portfolio).

Spike in total income

For the quarter under review, the PSB’s total income increased to ₹2,042 crore (₹1,974 crore). It had recorded a total income of ₹ 1,997 crore in the second quarter. For the nine months ended December 31, 2021, PSB has reported a net profit of ₹693 crore as against net loss of ₹2,894 crore in the same period in the previous year.

Krishnan said the bank — which was earlier focusing largely on wholesale banking — is now looking to reduce its concentration risk and increase its focus on the retail segment. PSB is also focused on increasing CASA and has gone in for technology transformation and is all set to introduce the latest version of core banking. 

Asked about the bank’s exposure to Air India, which was privatised recently, and whether the exposure amount has been recovered, Krishnan said the bank had an exposure of ₹1,500 crore and the entire sum has now been received by the bank.

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