Money & Banking

PNB trims loss in Q4 on improved asset quality; returns to black in FY’19-20

Our Bureau New Delhi | Updated on June 20, 2020

Ch SS Mallikarjuna Rao, MD and CEO, PNB

Aided by an improved asset quality, Punjab National Bank (PNB), the country’s second largest public sector bank, on Friday reported a standalone net loss of ₹697 crore for the quarter ended March 31, 2020. This was much lower than the net loss of ₹4,750 crore the bank had recorded in the same quarter last fiscal.

A strong operating profit increase of 37.4 per cent coupled with 39.2 per cent decline in provisions for the quarter under review bolstered the bottomline performance. While operating profit came in at ₹3,932 crore (₹2,861 crore), provisions stood at ₹4,629 crore (₹7,611 crore).

Total income for the quarter ended March 31, 2020 grew 11.3 per cent at ₹16,388 crore (₹14,725 crore). Provision for NPAs for the quarter under review fell sharply to ₹4,618 crore (₹9,154 crore).

For the entire 2019-20, PNB has returned to black, reporting a standalone net profit of ₹326 crore against net loss of Rs 9975 crore in the previous fiscal. A 37.3 per cent decline in provisions at ₹14,402 crore (₹22,971 crore) helped boost the bottomline performance. Operating profit of the bank for 2019-20 grew 13.4 per cent to ₹14,739 crore (₹12,995 crore).

Total income for the entire 2019-20 grew 7.5 per cent at ₹63,074 crore (₹58,688 crore).

Speaking to reporters on Saturday, CH S.S.Mallikarjuna Rao, Managing Director & CEO, PNB expressed confidence that the bank would post moderate profits in each of the quarters this fiscal despite the current COVID-19 situation. In the first two quarters, PNB expects to register good gains (already booked ₹1,000 crore gains in the first quarter) from treasury profits, he said. PNB expects some economic recovery in third quarter and strong rebound from January 1 next year, according to Rao. Owing to the difficult COVID-19 situation, PNB has now lowered the credit growth target to 6 per cent for the current fiscal as against the earlier targeted 12 per cent.

Rao also said that PNB was quite comfortable on the capital front and intends to make an assessment of the growth capital requirement in its next Board meeting. He also said that PNB was quite hopeful of recovering Rs 6,000-8,000 crore from NCLT cases this fiscal.

On RBI announced moratorium due to COVID-19 pandemic, Rao said that as many as 30 per cent of the retail borrowers have opted for the facility.

On the three way amalgamation with Oriental Bank of Commerce and United Bank of India, which came into effect from April 1, Rao said that the benefits of the organisational restructuring will begin to flow into the combined entity in third or fourth quarter this fiscal/   In 2019-20, PNB had made cash recovery in excess of Rs 10,000 crore. For the current fiscal, the bank is yet to decide on the target for cash recovery, he added. 

Meanwhile, in a late night filing with the stock exchanges, PNB said that the COVID-19 situation continues to be uncertain and the bank is evaluating it on an ongoing basis.

“The management believes that no adjustments are required in the financial results as it (pandemic) does not significantly impact the current financial year. 

Despite these events and conditions, there would not be any significant impact on bank’s result in future and going concerns, assumptions as at presently made," PNB said.

Shares of PNB closed at ₹34.50, up 1.77 percent over the previous day’s close, at National Stock Exchange on Friday.


Published on June 20, 2020

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