Punjab National Bank Q3 PAT seen up 16% at Rs 1262 cr

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Punjab National Bank Q3 PAT seen up 16% at Rs 1262 cr

Punjab National Bank, second largest bank by total assets, is likely to report a profit after tax of Rs 1,262 crore in the quarter ended December FY12, rising 16% as compared to Rs 1,090 crore in the corresponding quarter of last fiscal.

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Punjab National Bank , second largest bank by total assets, is likely to report a profit after tax of Rs 1,262 crore in the quarter ended December FY12, rising 16% as compared to Rs 1,090 crore in the corresponding quarter of last fiscal.
 
Net interest income is seen going up by 9.5% to Rs 3,510 crore from Rs 3,203 crore year-on-year.

Expectations

- Stable NIMS expected QoQ
* NIMs in Q2 was 3.95%

- Loan growth expected 18-19%

- Fee income likely to grow at 25%

- Slippages likely to be elevated.
* But traction in recoveries and up gradations should help to contain Gross NPA

- Provisions likely to decline QoQ - driving profitability

- In Q2FY12 PNB restructured loans of Rs 4100 crore
* Restructuring likely to increase further

Key Concerns

- Exposure to infra (15% of book) & to commercial real estate (6.7% of book)

- Rs 600 crore exposure to KFA (If it becomes an NPL slippages will rise sharply from Rs 1000 crore to Rs 1600 crore QOQ)

- One big concern - high level of restructured loans at 6% of total loans

- Rs 2000 crore exposure to Air India; Rs 1100 crore to GTL, Rs 3300 crore to Haryana/UP/Rajasthan SEBs ((All in the restructuring pipeline currently))
* If these are restructured, restructured loans will increase from 6% to 8%
* Total SEB exposure: Rs 7800 crore