PNB Q3 profit up 4-fold at Rs 207cr, slippages down at Rs 4800cr

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Moneycontrol Bureau

State-run lender Punjab National Bank's profit increased four-fold to Rs 207.2 crore in October-December quarter compared with Rs 51.01 crore in same quarter last year. It was driven by other income and lower provisions.

Net interest income, the difference between interest earned and interest expended, fell 9.4 percent year-on-year to Rs 3,730.80 crore in October-December quarter, with negative loan growth of 1.8 percent at Rs 3.85 lakh crore.

Deposits growth for the quarter was 11.6 percent at Rs 6.12 lakh crore compared with Rs 5.48 lakh crore in corresponding quarter of last fiscal, the bank said in its filing. Currency demonetisation helped deposits grow in Q3.

Earnings came in lower than analysts' estimates but the bank lowered its provisions & slippages and improved asset quality in the quarter gone by.

Profit was expected at Rs 606 crore and net interest income at Rs 3,931 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Gross non-performing assets (NPA) as a percentage of gross advances increased 7 basis points sequentially to 13.7 percent but net NPA fell to 9.09 percent (from 9.1 percent) in Q3.

In absolute terms, gross NPA during the quarter declined 1.5 percent to Rs 55,627.5 crore and net NPA fell 2 percent to Rs 34,993.5 crore compared with previous quarter due to fall in slippages.

Provisions for bad loans slipped 22.2 percent year-on-year to Rs 2,936 crore but increased 15.86 percent on sequential basis. Provision coverage ratio improved to 55.96 percent at the end of December 2016, from 53.32 percent in September 2016.

While addressing press conference, Usha Ananthasubramanian, MD and CEO said reduction in slippages in NPA translated in higher operating profit during the quarter.

Fresh slippages for the quarter stood at Rs 4,800 crore against Rs 5,089 crore in previous quarter and Rs 13,482 crore in corresponding quarter of last fiscal.

Ananthasubramanian said recovery in Q3 was at Rs 2,413 crore and upgradation at Rs 1,534 crore.

Other income (non-interest income) in Q3 shot up 50.5 percent to Rs 2,513.5 crore and operating profit increased 8.1 percent to Rs 3,154.6 crore compared with year-ago quarter.

At 12:46 hours IST, the stock was quoting at Rs 154.70, up Rs 5.05, or 3.37 percent on the Bombay Stock Exchange.