Money & Banking

PNB back in the black with Q1 profit of ₹1,019 cr

K R Srivats New Delhi | Updated on July 26, 2019 Published on July 26, 2019

File photo   -  The Hindu

Lower provisioning helps the lender to improve bottomline performance

Punjab National Bank (PNB) has reported a net profit of ₹1,019 crore, compared to a net loss of ₹940 crore it recorded in the same quarter last fiscal.

The bottomline performance was bolstered by a substantial reduction in provisioning for non-performing assets at ₹2,147 crore (₹4,982 crore).

Encouraged by the better Q1 financial performance, PNB has declared “profitability and value creation” as the theme for the current financial year.

“I am pretty well confident that this year will be a year of profitability, and hence, the theme,” said Sunil Mehta, MD and CEO. Commenting on the latest financial performance, Mehta said the bank has done a good job on stressed loan recovery and that both gross NPA and net NPA ratios have come down during the quarter under review.

While GNPA has declined to 16.49 per cent (18.26 per cent), NNPA has fallen to 7.17 per cent (10.58 per cent)

“Despite the recovery from the NCLT being negligible during the first quarter under review, our general recovery has been good and this has helped,” said Mehta.

Mehta also expressed confidence that resolution would be found in this quarter itself in two of the large cases before the NCLT, in which the bank has an aggregate exposure of ₹6,000 crore. Once resolved, this would bring at least ₹4,000 crore to its profit and loss account.

“The government has moved amendments to the IBC. Hopefully, the IBC amendments will go through before August 7. The amendments to the IBC will be beneficial for us, and hope to see the two large cases go through in this quarter itself,” he said.

As for PNB’s exposure to troubled NBFCs, Mehta said the exposure was quite low.

It may be recalled that PNB had reported a net loss of ₹4,750 crore in the fourth quarter ended March 31, 2019.

Operating profit of the bank for the quarter under review stood at ₹3,481 crore (₹4,195 crore). Slippages have come down to ₹4,711 crore (₹5,250 crore). PNB had recorded an operating profit of ₹2,861 crore in the fourth quarter ended March 31, 2019.

Total income for the quarter under review increased to ₹15,162 crore (₹15,072 crore).

Published on July 26, 2019
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