Q4 Results: Punjab National Bank Reports Rs 4,750-Crore Surprise Loss On Higher Provisions

Punjab National Bank reported a surprise quarterly loss on higher-than-expected provisions.The government-owned lender reported a loss of Rs 4,750 crore in quarter ended March compared to a Rs 13,417-crore loss in the same quarter last year, according to a press release. Analysts tracked by Bloomberg had expected a profit of Rs 263 crore. The bank had reported the Rs 14,000-crore fraud involving jewellers Nirav Modi and Mehul Choksi in the year-ago period.Net interest income rose 37.1 percent year-on-year to Rs 4,200 crore, less than the Rs 4,446 crore estimate.Asset quality of the lender improved during the quarter ended March. Gross non-performing asset ratio contracted to 15.5 percent from 18.38 percent in the previous quarter. The net NPA ratio narrowed to 6.56 percent from 11.24 percent.But provisions rose to Rs 7,611 crore from Rs 2,753 crore in the previous quarter. Provisions in the year-ago period stood at Rs 12,970 crore. Sunil Mehta, managing director and chief executive officer at PNB, had said after the October-December earnings that the bank had completely provided for the fraud.With this, the provision coverage ratio has improved to 74.5 percent from 68.85 percent last quarter.Slippages for the fourth quarter, which factor in Jet Airways Ltd. and Infrastructure Leasing & Financial Services Ltd., stood at Rs 5,200 crore, Mehta said at the press conference today.Other HighlightsDomestic business grew 11.1 percent to Rs 1.14 lakh crore for the year as of March 2019.Domestic casa ratio stood at 43.51 percent as of March 2019.Gross recovery of more than Rs 20,000 crore in FY19 against Rs 9,666 crore in FY18.Gross domestic advances grew 14.1 percent as of March 2019.Retail advances grew 21.7 percent, while housing loans grew 25.4 percent.Shares of the lender fluctuated between gains and losses to trade little changed at Rs 89.55 after the earnings announcement. The compared with a 0.29 percent gain in the Nifty PSU Bank Index.PNB has risen merely 1 percent over the last 12 months compared to more than 18 percent increase in the Nifty Bank Index. However, on a year-to-date basis, the stock has gained 14.5 percent, tracking the banking gauge.

Q4 Results: Punjab National Bank Reports Rs 4,750-Crore Surprise Loss On Higher Provisions

PNB’s asset quality improved in the fourth quarter even as provisions rose.

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Q4 Results: Punjab National Bank Reports Rs 4,750-Crore Surprise Loss On Higher Provisions

PNB’s asset quality improved in the fourth quarter even as provisions rose.

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