Public sector lender Punjab National Bank's (PNB) July-September quarter profit is seen rising 61.5 percent year-on-year to Rs 929 crore due to low base in year-ago period and lower tax rate, according to average of estimates of analysts polled by CNBC-TV18.
Net interest income, the difference between interest earned and interest expended, may increase 1.2 percent to Rs 4,202 crore from Rs 4,151.2 crore in same period. It could be impacted by interest reversals.
Provisions will be key to profit growth. Provisions surged 95.2 percent Y-o-Y & fell 53 percent Q-o-Q to Rs 1,811 crore in Q1FY16.
Recoveries from written off accounts (that aided other income in Q1) would be closely watched. Analysts say pick up in core fee income may be a positive for the stock.
Advances may continue being sluggish at around 10 percent against 9.6 percent in year-ago period.
Further improvement or stability in asset quality could be a big positive. The bank post Q1 earnings said gross non-performing assets in Q2 should be slightly better than June quarter. In Q1FY16, gross NPA stabilised after worsening in previous nine quarters and in fact slippages during June quarter fell to lowest in past six quarters.
Slippages are estimated at around Rs 3,000 crore against Rs 2,802 crore in preceding quarter and Rs 7,424 crore in March quarter 2015.
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