PNB Q1 net dips 49% to Rs 721 crore on higher provisioning

Punjab National Bank (PNB)'s first quarter net profit of current fiscal Tuesday showed a 48.68 percent decline from Rs 1,405 crore reported the same quarter of 2014-15 fiscal.

New Delhi: Country's second largest PSU lender Punjab National Bank (PNB) on Tuesday posted a 48.68 percent plunge in its first quarter net profit at Rs 721 crore, dragged down by higher bad loan provisioning and subdued credit growth.

The bank's net profit for the June quarter a year ago stood at Rs 1,405 crore, it said in a statement.

The gross non-performing assets (NPAs) increased to Rs 25,397 crore in the June quarter as against Rs 19,603 crore in the same period last year, the statement said.

The gross NPAs of the bank as a percentage of total advances rose to 6.47 percent during the April-June quarter, compared with 5.48 percent in the year-ago period.

The bank's provisioning during the June quarter rose to Rs 1,811 crore, from Rs 928 crore in the corresponding period last fiscal.

"Credit of the Bank for the first quarter of the current fiscal registered a growth of 9.6 percent to Rs 3,80,880 crore. The growth in credit in the first quarter was not as much as we were envisaging. Probably Q2 is going to be better, Q3 will be still better and I am going to end this year with really wonderful results," PNB Executive Director (with additional charge of MD & CEO) Gauri Shankar said.

Interest income of the bank rose to Rs 12,035 crore during the first quarter, up nearly 4 percent from Rs 11,589 crore in the corresponding three months' period of 2014-15.

Total income of the bank rose to Rs 13,432 crore in the June quarter, from Rs 12,825 crore in the same period previous fiscal.

The bank today also said that it has reported to the Reserve Bank 400 'wilful defaulters', and plans to sell Non Performing Assets (NPAs) worth up to Rs 3,000 crore to Asset Reconstruction Companies (ARCs) in the current fiscal.

"400 accounts are there (wilful defaulters) which we have reported to RBI so that it (list) can updated on website of RBI," Shankar said here.

He also said the bank has identified corporate accounts and the work is underway for their strategic debt restructuring as per the RBI guidelines.

"Let me tell you, 4-5 companies' accounts (stressed assets), we have already identified. Work is on for strategic debt restructuring, which we are going to do as per RBI guidelines," he said.

"The fresh restructuring done during the first quarter is just Rs 676 crore in 22 accounts," he added. The sectors in which restructuring has taken place include power and steel.

Shankar said PNB plans to sell NPAs worth Rs 2,600-3,000 crore to ARCs in the current financial year.

On the bank going to qualified institutional buyers (QIBs), he said it would be done next fiscal.

Total business of the bank reached Rs 8,98,613 crore as on June 30, 2015 against Rs 7,92,405 crore a year ago, showing a year-on-year growth of 13.4 percent.

Deposits of the bank rose to Rs 5,17,733 crore as on June 30, 2015 from Rs 4,44,920 crore as on June 30, 2014, a year-on-year growth of 16.4 percent, Shankar said.

Current and Savings Account ratio (CASA) deposits increased to Rs 1,81,494 crore as on June 2015 from Rs 1,63,642 crore in June 14, recording a growth of Rs 10.0 percent, he added.

PNB's retail loans outstanding grew 25 percent (Y-o-Y) to Rs 48,916 crore in the June 2015 quarter as against Rs 39,035 crore a year ago.

Priority sector advances grew by 25.38 percent (YoY) to Rs 1,42,342 crore, Shankar said, adding outstanding agriculture advances were Rs 57,314 crore as on June 30, 2015.

Shares of PNB closed 6.70 percent higher at Rs 142 on the BSE.

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