Punjab National Bank (PNB) is expected to report a 8 percent growth in net profit and net interest income for the quarter ended March, according to the average of estimates of analysts polled by CNBC-TV18. The PSU bank will announce its earnings on Tuesday.
Net profit may increase to Rs 873 crore during January-March quarter compared Rs 806 crore in the year-ago period. During the same period, net interest income climbed to Rs 4,322 crore from Rs 4,002 crore.
Provisions may remain elevated in Q4 but are expected to be lower, primarily due to high base in the year-ago quarter. In Q4FY14, provisions spiked up 45 percent Y-o-Y to Rs 2,139 crore. Even the financial year 2013-14 was a tough year for PNB with profit falling 29.6 percent to Rs 3,342 crore as provisions spiked up 52.6 percent Y-o-Y to Rs 6,694 crore.
Analysts feel asset quality woes may continue during the quarter. Even the management (post Q3 earnings) had said the stress will continue for next 1-2 quarters. Gross non-performing assets (NPA) increased by 72 basis points to 5.97 percent in Q3FY15 from 5.25 percent in Q4FY14.
Restructured pipeline of Rs 650 crore atleast in Q4 is expected. Additionally analysts expect higher restructuring due to forbearance ending. Slippages could be lower on sequential basis. Slippages from restructured book will be watched.
Operating profit could be pulled down by higher wage costs. In Q3, staff cost increased by 15.4 percent Y-o-Y to Rs 2,029 crore owning to provisions made for AS 15. Hence, operating profit rose by only 1.8 percent Y-o-Y.
Analysts expect around 5-7 percent growth in non-interest income. In Q3, non-interest income supported profit, rising 37.5 percent Y-o-Y to Rs 1,291 crore as treasury gains were robust, up 69 percent Y-o-Y to Rs 211 crore.
Net interest margin is expected to be between 3.2 percent and 3.3 percent for the quarter ended March 2015. As of Q3, NIM was 3.21 percent against 3.18 percent in previous quarter.
The poll expects loan growth at 10 percent in March quarter against 11 percent in December quarter.
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