Punjab National Bank’s Asset Quality Stabilises 

Punjab National Bank surpassed analyst estimates in the July to September quarter despite an 11.5 percent drop in profit. The government-owned lender also reported better operational performance as asset quality stabilised.

Net profit fell to Rs 549.4 crore from Rs 621 crore in the same period last year, according to the lender's exchange filing. The consensus of analyst estimates tracked by Bloomberg stood at Rs 502.3 crore.

Net interest income decreased 10.2 percent to Rs 3,879.9 crore, beating the Rs 3,535.2 crore consensus of analysts.

Asset Quality Picture

Punjab National Bank's gross bad loans declined 0.3 percent to Rs 56,465.6 crore from Rs 56,654.1 crore in the April to June quarter. Gross non-performing loans as a percentage of assets dipped to 13.63 percent from 13.75 percent in the previous quarter. Net non-performing assets came in 9.10 percent compared to 9.16 percent earlier.

Provisions declined 7.5 percent to Rs 2,533.8 crore on a sequential basis, while the provisioning burden increased 34.6 percent when compared to the corresponding quarter last year. The provision coverage ratio stood at 53.32 percent.

Other Highlights

• Capital adequacy ratio stood at 11.65 percent, higher than the 11.5 percent required by the end of fiscal 2019 under Basel III norms.
• Current and savings account deposit growth stood at 11.1 percent.
• Small ticket advances grew at 13 percent.