New Delhi: State-run Punjab National Bank's net profit declined by over 28 percent to Rs 806.35 crore in the quarter ended March, 2014, due to higher provisioning for rising bad loans.
The PSU bank had a profit of Rs 1,131 crore in the corresponding January-March period a year ago.
"We had fresh slippage of Rs 4,189 crore and increase in existing NPAs (non-performing assets) to Rs 263 crore, totaling Rs 4,452 crore," PNB Chairman and Managing Director K R Kamath told reporters here.
"We have taken note of this pressure on the asset quality and drawn a strategy and launched a recovery campaign. We will reverse the trend and bring about improvement in the asset quality," Kamath said.
Provisioning for bad loans jumped by 45 percent to Rs 2,139 crore during the quarter, as against Rs 1,478 crore in the same period a year ago.
Gross non-performing assets (NPAs) stood at 5.25 percent for the quarter under review, up from 4.27 percent in the year-ago period. The net NPAs stood at 2.85 percent at the end of the quarter.
Following the financial results, shares of the bank tanked 4.1 percent to settle at Rs 800.05 on BSE as against 1.36 percent gains in broader stock market.
Kamath said slippages came in from all sectors. However, it received good results from recovery campaign and the tempo will be maintained in 2014-15 also to reverse the trend and bring about change in asset quality, he added.
Sector-wise, retail loan sector did well and the bank will continue to focus on agriculture, retail and SME segments, he said.
Interest income rose to Rs 11,101 crore in the January- March quarter FY14, from Rs 10,378 crore in the corresponding period last year.
Total income increased to Rs 12,498.23 crore during the fourth quarter, from Rs 11,552.84 crore in the same period of the previous fiscal.
For full 2013-14 fiscal, PNB's net profit dropped 29.6 percent to Rs 3,342.57 crore, as against Rs 4,747.67 crore in the previous year.
Total income rose to Rs 47,799.96 crore in 2013-14, from Rs 46,109.25 crore in the previous financial year. Interest income for the full fiscal stood at Rs 43,223 crore, up from Rs 41,885 crore in 2012-13.
The Net Interest Margin (NIM) -- the gauge of profitability -- was at 3.20 percent in the last quarter of FY14, and 3.44 percent for the entire fiscal.
For the current fiscal, Kamath said the bank expects to grow at about 15 percent in 2014-15 while the NIM is expected to be at around 3.25 percent.