Punjab National Bank reported better-than-anticipated quarterly earnings backed by an improvement in asset quality.
Net profit rose 2 percent year-on-year to Rs 561 crore for the three-month period ending September, the state-run lender said on Friday. This was substantially higher than the Rs 387 crore consensus estimate of analysts tracked by Bloomberg. The improved net profit was aided by a 10.7 percent growth in the lender's total deposits and improved asset quality.
Net interest income, or the bank's core income, rose 3.5 percent to Rs 4,020 crore year-on-year, also higher than the Rs 3,942 crore forecast. net interest margin stood at 2.6 percent, the company said at a press conference.
Asset quality improved for the quarter as gross non-performing loans remained stable. Total bad loans contracted by 30 basis points to 13.3 percent on a quarter-on-quarter basis. Meanwhile, provisions remained high at Rs 2,694 crore due to rise in fresh impairments. Fresh slippages rose to Rs 8,449 crore during the April to September period.
The lender disclosed a Rs 6,000 crore exposure to 20 of the total accounts referred by the to the National Company Law Tribunal for insolvency and bankruptcy proceedings.
Key Highlights
- Operating profit grew 20 percent aided by lower employee costs
- Total advances rose 4.2 percent year-on-year
- Total deposits rose 10.7 percent
- Provision coverage ratio improved by 100 basis points to 59.23 percent quarter-on-quarter
- Capital adequacy ratio stood at 11.56 percent
Earlier in the day, the board of Punjab National Bank approved a proposal to sell a partial stake in PNB Housing Finance. The company may sell as much as 9 percent stake, the management said at the press conference. The lender currently owns a 38.86 percent stake in its associate company.
Shares of the lender rose around 4 percent to Rs 205 apiece after the results announcement.
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