Fraud-hit Punjab National Bank (PNB) informed analysts that it may take six months for normalcy to return to the lender.
“They said within six months they will come out of this situation…I cannot say what they actually meant…whether in six months they will recover the money or get additional funds,” said an analyst, who participated in the conference call, on condition of anonymity
The management said the exact liability on account of the fraud was yet to be ascertained but could be ₹11,500 crore, the analysts said.
On Wednesday, the second largest lender of the country informed the stock exchanges about detection of $1.77 billion (₹11,500 crore) unauthorised transactions where fraudulent letters of undertaking (LoUs) were issued from a branch in Mumbai to secure overseas credit.
“We are already in discussion with all the lenders. If the entire onus is on us, we are not going to back away from it,” said Sunil Mehra, MD & CEO, PNB, at a news conference on Thursday.
“We don’t have any funded exposure as of now, but whatever is our liability that will be worked out under the investigation, we will take action,” Mr. Mehta said.
PNB officials maintained that it was a standalone case involving one branch and no other branch was involved in the matter.
Analysts said while the bank management did not comment on the write-offs it would have to make, it assured investors that it was well-capitalised to meet regulatory requirements.
The lender also said it had resources in terms of non-core assets that can be monetised to strengthen the bank’s capital position.
The government has 57% stake in the New Delhi-headquartered bank and its capital adequacy ratio as on December 31, 2017 was 11.58% with common equity tier-I capital ratio of 8.05%.
The second largest lender of the country had reported Rs 1134 crore for the first nine months of the current financial year - a growth of only 6.7% over the same period of previous year. The bank reported gross non-performing asset of ₹57,519 crore as on end December which was 12.11% of its total advances.
