PNB reports profit in Q1FY20, net NPAs rise QoQ

Punjab National bank (PNB) on Friday reported a profit of Rs 1,018.63 crore for the quarter ended June 30, 2019 against loss of Rs 940 crore registered in the corresponding quarter of the previous fiscal. 

Provisions and contingencies stood at Rs 2,023.31 crore, down 64.8 per cent against 5,758.16 crore logged in the year-ago period. Sequentially, the numbers droped 79.9 per cent. In the March quarter, figures stood at Rs 10,071.11 crore.

It was a positive surprise from the bank as most analysts had projected loss for the period.  

For instance, analysts at Edelweiss Securities had forecast the public sector lender to report a loss of Rs 905.8 crore while those at Phillip Capital had estimated NII at Rs 4,316.5 crore, down 8 per cent YoY and a loss of Rs 1,006.9 crore.

“Business momentum is expected to be softer (albeit improving). The asset quality performance is likely to show some improvement… That said credit cost will be higher,” Edelweiss Securities had written in a results preview note. 

Gross NPAs increased to 16.49 per cent against 15.50 per cent in the previous quarter. In the year-ago period, the figures stood at 18.26 per cent. Net NPA (non-performing assets) declined year-on-year (YoY) to 7.17 per cent against 10.58 per cent in the year-ago period. Sequentially it rose as in the March quarter, the figures stood at 6.56 per cent.

Basic diluted EPS (earnings per shares) came in at Rs 2.21 against Rs (-) 3.41 in the year-ago period. 

"Bank has reported one loan account in the Power and Steel sector under Borrowal Fraud category to RBI during Quarter II of current FY involving an amount of Rs 3760.62 crore outstanding as on 30.06.2019. The account was already under NPA category since FY2016 and provision amounting to Rs 1,880.44 crore was held in the account as at June 30, 2016. This is a consortium advance of 33 lenders which is near resolution stage under NCLT. The remaining provision in the fraud account will be done by the Bank in terms of extant RBI guidelines," PNB said in its press release.