Beating analysts’ expectations, Punjab National Bank on Monday announced a 137% year-on-year jump in its net profit to Rs 4,714 crore for the second quarter of the current fiscal, driven by a decline in new provisions and contingencies.
Analysts polled by Bloomberg had estimated the bank to post a Rs 3,382-crore net profit.
An over Rs 3,150-crore decline in new provisions, higher interest income and improved asset quality contributed to the jump in the second quarter profit.
Another large state-owned lender Bank of Baroda also reported a significant rise in its net profit, driven by healthy advances. BoB’s Q2 profit jumped 23% while the net interest margin came at 3.10%, down from 3.18% in the preceding quarter but up from 3.07% in the year-ago period.
PNB’s net interest income rose 6% to Rs 10,517 crore, compared with Rs 9,923 crore in the year-ago period. Non-interest income grew 22% to Rs 796 crore. The net interest margin came at 3.06% for the latest quarter, down from 3.24% a year ago.
New provisions and contingencies fell sharply to Rs 288 crore, from Rs 3,444.2 crore, giving the PSB’s bottom line a big boost.
PNB’s gross NPA ratio improved to Rs 4.48% at the end of September, from 4.98% at the end of June. The net NPA ratio improved to 0.48% from 0.6% in the preceding quarter.
This is the best quarter in terms of profitability. Recovery was more than slippages,” said Atul Kumar Goel, managing director and CEO. He said nearly 14 accounts of bad loans were transferred to National Asset Reconstruction Company.
The provisioning coverage ratio (including technical written-off accounts) as of September 30, 2024 rose to 96.67% from 91.91% in the year-ago period.
Global deposits registered a growth of 11.33% on a Y-o-Y basis to Rs 14,58,342 crore. Global yield on advances was at 8.31%.
During the quarter, the bank made floating provision of Rs 350 crore in line with the board-approved policy.