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Pulled down by near doubling of bad loan provisioning, Punjab National Bank’s net profit for the first quarter ended June 2015 halved to ₹ 721 crore from a level of ₹ 1,405 crore in same quarter last fiscal.
The latest June quarter bottomline performance is however much higher on a sequential basis when compared to the March quarter net profit of ₹ 307 crore.
Net interest income for the quarter under review declined 6.3 per cent to ₹ 4,102 crore (₹ 4,380 crore). Other income grew 13 percent to ₹ 1,398 crore. Operating profit increased marginally to ₹ 3,132 crore (₹ 3,125 crore)
Bad loan provisioning zoomed to ₹ 1,811 in the first quarter this fiscal as against ₹ 928 crore in same period last fiscal. This was however much lower than the March quarter provisioning level of ₹ 3,834 crore.
The bank’s senior management is clearly focused on addressing the poor asset quality situation. PNB will this fiscal look to sell bad loans amounting to ₹ 2,600 crore to ₹ 3,000 crore to asset reconstruction companies, its Executive Director Gauri Shankar said here.
Shankar, who is holding additional charge of Managing Director & Chief Executive Officer, also said that the bank has already sent a list of 40 ‘wilful defaulters’ names to the Reserve Bank of India for updating the website.
Meanwhile, PNB has said in the notes to financial statements that it had a provisioning coverage ratio of 59.32 per cent as on June 30, 2015.
This public sector lender has also said that it has no “direct exposure” to the coal blocks/mines cancelled by the Supreme Court.
However, the impact if any, of such cancellation on the valuation of security, penalty imposed and consequent viability of the projects financed by the bank dependent on such coal blocks, being unascertainable at this stage has not been considered.
Meanwhile, the share price of PNB closed at ₹ 142.50 at the National Stock Exchange on Tuesday, higher 5.44 percent over previous day’s close of ₹ 135.15 (face value ₹ 2).
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