State-run lender Punjab National Bank on Tuesday announced a more than four-fold increase in its net profit in the third quarter of this financial year to ₹207.2 crore compared with the same quarter of the previous financial year. Gross non-performing assets reduced in absolute terms compared with Q2 of this financial year.
The bank had reported a net profit of ₹51.01 crore in the third quarter of the previous financial year following the asset quality review of the Reserve Bank of India in which banks were asked to classify several loans as non-performing.
During the third quarter, the bank made a provision of ₹3,363 crore for NPAs as compared with ₹3,767 crore during the same period of the previous year and ₹2,218 crore in Q2. The bank registered a 2% dip in its gross non-performing assets in Q3 as compared with Q2, but this was still 62% higher than what was seen in the third quarter of the previous financial year.
The gross NPA ratio as of end-December was 13.70% as compared with 8.47% a year earlier.
Net interest income, at ₹3,730.8 crore in Q3, was down 9.4% over the same period of 2015-16. Non-interest income, however, was up more than 50% year-on-year at ₹2,513.5 crore.
Net declines QoQ
“PNB’s Q3FY17 PAT declined 62% QoQ, largely due to a 4% QoQ drop in NII (net interest income) and an above-expected rise in operating expenses and provisions,” Religare Institutional Research said in a report.
“PNB’s absolute GNPAs declined by ~2% QoQ in Q3FY17 as fresh slippages reduced to ₹48 billion from ₹51 billion in Q2. The pace of fresh slippages has been slowing for the bank, but still remains elevated,” Religare added.
PNB Managing Director and CEO Usha Ananthasubramanian said that the bank had witnessed ₹54,000 crore current account/savings account (CASA) deposits in the period from November 8 to December 31.
“PNB’s loan book dipped 2% QoQ and domestic NIM (net interest margin) contracted 24 bps QoQ to 2.6%,” Religare said. “We pare FY17-FY19 profit after tax estimates by 9-27% to factor in the slower loan growth and higher provisions.”
