Public sector lender Punjab and Sind Bank on Saturday reported a 25% decline in net profit to Rs 153 crore for the June 2023 quarter, partly due to the provision of wage revision and fresh slippages.
The lender had reported a net profit of Rs 205 crore in the April-June quarter of FY23.
The total income increased to Rs 2,494 crore in the first quarter of FY24 against Rs 1,915 crore a year ago, as per a regulatory filing.
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During the quarter, the bank earned an interest income of Rs 2,316 crore compared to Rs 1,800 crore in the year-ago period.
Explaining the reason for the decline in profit, Punjab and Sind Bank managing director Swarup Kumar Saha said the bank has made a Rs 57 crore provision towards the wage revision under negotiation and Rs 450 crore in fresh slippages, including a mid-corporate of Rs 92 crore in the quarter.
The bank has made a provision of Rs 42 crore for that particular account, which is in the logistics business, he said.
On the asset quality side, there was an improvement in gross non-performing assets of the total advances, easing to 6.80 per cent at June-end from 11.34% a year earlier.
Similarly, net NPAs declined to 1.95 per cent in June 2023 against 2.56%.
The bank aims to bring down gross NPA to 6 per cent while Net NPA below 1.5% during the year, Saha said.
The provision coverage ratio stood at 88.58% against 88.10 in the same quarter of the last fiscal.
Its capital adequacy ratio increased to 17.19% from 16.79% at the end of June 2022.
With regard to recovery, its managing director Swarup Kumar Saha said the bank expects a recovery of Rs 1,500 crore in the current financial year.
During the quarter, the bank recovered Rs 345 crore from non-performing assets.
With regard to business growth, Saha said credit growth is expected to be 13-14%, while deposit mobilisation would witness a growth of 8-10% during the current fiscal.
The bank's net interest margin in the quarter increased to 2.63% from 2.53% a year ago.
The outlook on NIM for the entire financial year is 2.9%, Saha said.
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