Aided by strong operational performance and significantly lower NPA provisioning, Punjab National Bank (PNB) on Monday reported a 137 per cent increase in consolidated net profit for the quarter ended September 30, 2024 at ₹4,714 crore (₹1,990 crore).
The latest bottomline performance was the highest ever quarterly net profit recorded by the state-owned lender and is also higher than consolidated net profit of ₹3,976 crore in June 2024 quarter, latest filings with stock exchanges showed.
On a standalone basis, PNB’s net profit for the quarter under review increased 145 per cent to ₹4,303 crore (₹1,756 crore).
PNB, which is the country’s second largest public sector bank, has achieved another milestone with gross business mix surpassing ₹25 lakh crore.
Total Consolidated Income for the quarter under review increased 18 percent to ₹35,111 crore (₹29,857 crore). It was also higher than consolidated total income of ₹32,760 crore in June 2024 quarter.
For the quarter under review, provision for Non Performing Assets (NPAs) came down sharply to ₹184 crore (₹3,037 crore). It was also lower than NPA provision of ₹781 crore in June 2024 quarter. In the first half this fiscal, provisioning for NPA stood at ₹954 crore (₹7,400 crore), bank’s exchange filings showed.
Commenting on the latest financial performance, Atul Kumar Goel, Managing Director & CEO, attributed the strong growth in bottomline to sharp reduction in credit cost to 0.08 percent and also lower provisioning towards bad loans.
“This Q2 quarter has been the best quarter for us in last 16 quarters (4 years) in terms of net profit, net interest income, operating profit”, he said.
Encouraged by strong show, Goel said that the bank has revised its Gross NPA guidance to 3.5-3.75 percent. At the beginning of fiscal year, the guidance for GNPA was 5 percent of advances. This was lowered to 4 percent after Q1 results and now bank has further lowered GNPA guidance to 3.5-3.75 percent, Goel said.
Asked about the guidance for Net Interest Margin (NIM), Goel said that he expects NIM to be maintained at 2.9 percent to 3 percent for entire fiscal.
Goel also said that he expects RBI to cut interest rates by 25-50 basis points by March 2025.
On deposit rates, Goel said that deposit rates have peaked and that the bank aims to grow deposits by 10-11 percent this fiscal. On the other hand, the bank aims to grow its advances by 11-12 percent this fiscal.
Capital Raising
Goel highlighted that PNB’s Capital adequacy has touched 16.36 percent and for the first time it has surpassed 16 percent level.
PNB had recently raised ₹ 5,000 crore capital through Qualified Institutional Placement (QIP).
Besides this, PNB Board has approved capital raising of ₹ 7,000 crore via Tier-1 and ₹ 3,000 crore of Tier 2 capital.
“If interest rates come down, we will raise AT-1 bonds in current December quarter”, he added.
On Monday, encouraged by strong financial performance, the shares of PNB closed at ₹98.65, up 2.97 percent over the previous day’s close at BSE.