Privatization Of PSU Banks, Insurance Starts Soon

Privatization of the PSUs will now be resumed by the Government of India and about four unmerged banks and insurance companies will be privatized in the next part of the project.

The privatization of PSU Banks was postponed in 2020 due to the outbreak of the Coronavirus pandemic, which put the whole process on hold because of their low valuations and mounting stressed assets.

As per reports, Punjab & Sind Bank, IOB, Bank of Maharashtra might be privatized, along with state-run insurance companies, such as National Insurance Company, United India Insurance, and Oriental Insurance Company.

Prior to this, the Government had also sold their shares in the Bharat Petroleum Corp Ltd (BPCL), Shipping Corp of India (SCI), THDC India, and NEEPCO. The Govt also announced that it will also sell its 30% stake from the state run rail hauler Container Corp of India (Concor).

Recently, the Government of India had also announced economic reforms in wake of the Coronavirus pandemic, wherein it was declared that every PSU in India will be now privatized, except 4 in strategic sectors.

As per reports, a draft cabinet note has already been sent for inter-ministerial consultations to identity strategic and non-strategic sectors. 

A government official close to the development said, “A broader policy will look at sectors that have market imperfections due to the government’s presence, where the private sector can take the lead and ensure that the monopoly should not happen due to state-run companies.”

He also said that sectors like banks, insurance, space, defence will be privatized.

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Punjab & Sind Bank posts net loss in Q3

Punjab & Sind Bank on Monday reported a net loss of Rs 255.49 crore for the quarter ending December due to a spike in bad loans.

The state-owned lender had made a net profit of Rs 22.34 crore during the same quarter of the previous fiscal year.

Total income during the third quarter of 2019-20 declined to Rs 2,077.01 crore from Rs 2,337.13 crore for the year ago same period, the bank said in a regulatory filing.

Bad loans or non-performing assets (NPAs) of the bank showed deterioration as gross NPAs jumped to 13.58 per cent of gross advances by the end of December 2019 as against 11.19 per cent by the same period of 2018.

In value-terms, gross NPAs were Rs 8,923.49 crore by end-December, higher than Rs 7,990.67 crore at end-December 2018.

Net NPAs too increased to 8.71 per cent (Rs 5,417.79 crore) from 6.90 per cent (Rs 4,696.47 crore).

Provisions for bad loans during the quarter increased to Rs 464.01 crore as against Rs 453.88 crore the bank had parked aside in the year ago quarter.

The bank is carrying a provision of Rs 11.52 crore as against the outstanding balance of Rs 230.40 crore as at December 31, 2019 being 5 per cent of outstanding food credit availed by Punjab as per the RBI letter issued to SBI, the lead bank.

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Punjab & Sind Bank Q1 result, net loss narrows

Punjab & Sind Bank on Wednesday said its first quarter net loss narrowed on the back of lower provisioning and higher other income.

The bank posted a net loss of Rs.30 crore for the three months ended 30 June compared to a loss of Rs.398 crore in the year-ago period.

Provisions during the quarter decreased 67.37% to Rs.334.5 crore as against Rs.1,025 crore in the year-ago quarter. In the January-March quarter, the bank had set aside Rs.433.76 crore in provisions.

Other income, which includes core fee income, increased 10.39% to Rs.167 crore in the quarter as compared to Rs.151.25 crore a year ago.

Net interest income, or the difference between interest earned on loans and that paid on deposits, decreased 20.14% to Rs.567.59 crore from Rs.710.73 crore in the corresponding period last year.

Gross non-performing assets (NPAs), as a percentage of total advances, were at 12.88% in the June quarter compared with 11.83% in the March quarter and 10.55% in the year-ago June quarter.

Post-provision, the net NPA ratio was at 7.77% as against 7.22% in the January-March quarter and 5.92% in the year-ago quarter.

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Punjab & Sind Bank loss narrows in Q4FY19

State-owned Punjab & Sind Bank Friday said it has narrowed its net loss to Rs 58.57 crore in the March 2019 quarter, aided by lower provisioning.

The bank had posted a loss of Rs 524.62 crore in the corresponding quarter of the previous financial year. 

However, there was a net profit of Rs 22.34 crore in the preceding quarter ended December 2018.

Its total income in the quarter rose to Rs 2,304.37 crore, from Rs 2,337.13 crore in the year-ago period.

The asset quality of the bank witnessed worsening, as the gross non-performing assets (NPAs) rose to 11.83 per cent of gross advances at the end of March 2019 as against 11.19 per cent a year ago.

The net NPAs stood at 7.22 per cent, higher than 6.93 per cent at the end of March 2018.

In absolute terms, the gross NPAs were Rs 8,605.87 crore by the end of 2018-19, while it was at Rs 7,801.65 crore a year ago. Net NPAs were at Rs 4,994.23 crore as against Rs 4,607.87 crore.

Provisions for bad loans stood at Rs 312.09 crore for the March 2019 quarter, compared with Rs 768.36 crore in the year-ago period.

The bank said it was able to arrest yearly loss to Rs 543 crore against Rs 744 crore in 2017-18 due to improved operating profit and over 42 per cent growth in non-interest income.

Return on assets has also improved to (-) 0.47 per cent in 2018-19, compared with (-) 0.69 per cent of previous year, it said in a release.

Provision coverage ratio has improved to 59.46 per cent at the end of March from 54.41 per cent a year ago, it added.

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Punjab & Sind Bank reports net profit in Q3FY19

State-owned Punjab & Sind Bank on Tuesday reported a net profit of Rs 22 crore in the third quarter ended December 2018. It had reported a loss of Rs 258 crore in the corresponding period of 2017-18, according to a release by the company.

The bank's total income increased during the quarter to Rs 2,337.13 crore as against Rs 2,178.69 crore in the corresponding period of 2017-18.

Gross non-performing assets (NPAs) rose to 11.19 per cent of the gross advances at the end of the quarter, against 10.95 per cent in the year-ago period.

However, net NPAs declined to 6.90 per cent, compared with 7.20 per cent a year ago.

As a result, provisions for bad loans increased to Rs 453.88 crore during October-December 2018, against Rs 417.51 crore in the third quarter of the previous fiscal.

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Modi govt may merge these three PSBs to create giant PSU lender

The government is weighing the possibility of the next phase of consolidation in the public sector banking space by amalgamating three lenders —Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and Punjab & Sind Bank (P&SB), sources told FE.

“An inter-ministerial group (called Alternative Mechanism) under Union minister Arun Jaitley will take a final call on this plan. The (merger) option is on the table but whether the government is going to bite the bullet ahead of polls and announce amalgamation or choose to wait is yet to be seen,” said one of the sources.

While the headquarters of PNB and Punjab & Sind Bank are in Delhi that of OBC is in Gurugram (Haryana).,

The amalgamation, if approved, will be a part of the government’s efforts to create a few but strong banks with much larger balance sheets to support the rising appetite for credit of the fast-growing economy and enable optimum utilisation of resources. Upon amalgamation, the merged entity will have a combined business of over Rs16.5 lakh crore, deposits of Rs9.6 lakh crore and advances of close to Rs7 lakh crore, said the sources.

It will pip Bank of Baroda (into which Vijaya Bank and Dena Bank have recently merged) to become the second biggest public sector bank.

The net NPA ratio of PNB and OBC stood at 8.22% and 7.15%, respectively, as of December quarter, having improved from 11.24% and 10.48% at the end of March 2018.

PNB surprised analysts by recording a 7% rise in net profit in the three months through December 2018 following losses in three previous quarters. The Reserve Bank of India (RBI) last week lifted various restrictions on OBC, which had been under the prompt corrective action (PCA) framework since October 2017. Although Punjab and Sind Bank has witnessed losses in the first two quarters of this fiscal, on top of the losses in the last fiscal, it hasn’t made into the central bank’s watch list and its net non-performing asset (NPA) ratio of 5.25% is relatively decent.

The successful experience of merging State Bank of India with five of its subsidiaries and Bharatiya Mahila Bank, and the amalgamation of Bank of Baroda, Vijaya Bank and Dena Bank have given the government confidence that another round of consolidation can be handled without hiccups. However, given that PNB, OBC and Punjab & Sind Bank, while witnessing an improvement in their finances are not out of the woods yet, the government may choose to wait until their recovery takes roots, said another source.

Presenting the Interim Budget 2019-20, finance minister Piyush Goyal said: “Amalgamation of banks has also been done to reap the benefits of economies of scale, improved access to capital and to cover a larger geographical spread.”

Source - The Financial Express

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Punjab & Sind Bank reports net loss in Q2

State-owned Punjab & Sind Bank Tuesday reported a net loss of Rs 109.23 crore in the second quarter ended September 30, on higher bad loans provisioning. It had posted a net profit of Rs 13.70 crore in the corresponding quarter of the previous financial year, the bank said in a regulatory filing.

However, the lender reduced its losses when compared sequentially against Rs 398 crore in the first quarter ended June of the current fiscal. Its total income increased to Rs 2,409.41 crore during the quarter, against Rs 2,166.64 crore a year ago.

The bank's provisioning for bad loans or non-performing assets (NPAs) rose to Rs 400.90 crore for the quarter, from Rs 277.36 crore in the year-ago period. The overall provisioning and contingencies during the period were up at Rs 593.73 crore from Rs 294.83 crore a year ago, the bank said.

On asset front, gross NPAs showed improvement at 10.02 per cent of the gross loans, against 11.25 per cent at the end of September 2017. Net NPAs were 5.25 per cent of the net advances, down from 7.72 per cent a year ago.

In value terms, the bank's gross NPAs stood at Rs 7,202.17 crore by the end of September, against Rs 6,821.51 crore by September 2017. Net NPAs stood at Rs 3,583.37 crore, compared with Rs 4,501.94 crore.

The provision coverage ratio and liquidity coverage ratio were 64.79 per cent and 144.31 per cent, respectively, the bank said. 

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Punjab & Sind Bank reports net loss in Q1

State-owned Punjab & Sind Bank on Wednesday reported a net loss of Rs 398 crore in first quarter ended June as provisioning for bad loans increased significantly.It had reported a net profit of Rs 25.37 crore in the same period a year ago. In the preceding quarter ended March 2018, it had a net loss of Rs 524.62 crore, a dip in losses when compared sequentially.

For the entire 2017-18, the bank had posted a net loss of Rs 743.80 crore due to high proportion of bad loans.The bank in a regulatory filing said that the total income in April-June period of 2018-19 stood at Rs 2,336 crore, higher than Rs 2,062.57 crore in the same period of 2017-18.

For the June quarter, bank's provisioning for bad loans (or non-performing assets) shot up to Rs 795.38 crore as against Rs 259.20 crore set aside for the same period of the fiscal ended March 2018.

However, the bank brought down the proportion of soar assets with the gross NPAs falling to 10.55 percent of gross advances as on June 30, 2018 from 11.33 percent in year ago corresponding quarter.In value terms, gross NPAs stood at Rs 7,363.41 crore by end June this year as against Rs 6,693.36 crore. Net NPAs were 5.92 per cent (Rs 3,928.81 crore) as against 7.94 per cent (Rs 4,511.40 crore).

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