Punjab & Sind Bank loss zooms to Rs 2,375 crore in Q3 as provisions spike

Punjab & Sind Bank | Representative Image.

Punjab & Sind Bank on Saturday said its net loss in December quarter 2020-21 spiralled to Rs 2,375.53 crore on higher provisions for bad loans. The lender had posted a net loss of Rs 255.49 crore in the same period a year ago. In September quarter also, the bank had a loss of Rs 401.27 crore.

Total income in the quarter under review also fell to Rs 1,982.52 crore from Rs 2,077.01 crore in the same period of 2019-20, Punjab & Sind Bank said in a regulatory filing. Net income fell 9.1 per cent to Rs 1,763.10 crore and income on investments was down 12.1 per cent to Rs 455.42 crore.

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The bank's gross non-performing assets (NPAs) remained high at 13.14 per cent of the gross advances as of December 31, 2020, compared to 13.58 per cent by the year-ago same period. In value terms, gross NPAs or bad loans stood at Rs 8,489.89 crore by the end of December 2020 as against Rs 8,923.49 crore earlier.

Net NPAs came down significantly at 2.84 per cent (Rs 1,638.25 crore) as against 8.71 per cent (Rs 5,417.79 crore). Provisions for bad loans and contingenices spiked to Rs 2,924.69 crore during the quarter, as against Rs 494.30 crore. Of this, provisions for bad loans were Rs 1482.17 crore, which was higher than Rs 464.01 crore a year ago.

The bank said during quarter, it has fully provided for frauds declared up to December 31, 2020. In case of two NPA accounts having balance outstanding of Rs 758.77 crore where provision of Rs 486.81 crore was held till September 2020 and are declared fraud up to the reporting date, the bank has provided for the balance amount of Rs 271.96 crore till December 31, 2020.

"As such, a total provision of Rs 903.33 crore including these two accounts has been made during the quarter," the bank said. Further, the provisions held in respect of total borrowal accounts referred to NCLT stood at Rs 4,429.26 crore as against balance outstanding of Rs 4,965.66 crore, it added.

Also, as part of the one time MSME restructuring, the bank has restructured as many as 9,378 accounts worth Rs 470.54 crore. With respect to Supreme Court order and RBI guidelines, the bank has kept Delhi Airport Metro Express Pvt Ltd (DAMEPL) as standard account, it said further.

However, necessary provisions as per norms have been made wherein it has not treated amount worth Rs 156.52 crore (DAMEPL) as NPA and has held provisions of Rs 81.61 crore, which is higher than the required amount of Rs 62.88 crore, it said. Provision coverage ratio stood at 87.99 per cent by the end of December quarter against 76.12 per cent a year ago.

Besides, Rs 609.95 crore has been kept as provisions during the quarter with respect to accounts that were not declared as NPA till August 31, 2020, in accordance with the Supreme Court interim order of September 3 in response to a public interest litigation, the lender said.