Punjab National Bank on Tuesday reported a 63% year-on-year fall in its net profit for the second quarter of the current financial year to 411 crore on account of higher provisions. The bank’s provisions stood at4,906 crore, higher by 51% YoY in Q2FY23. Provisions for bad loans jumped 32% YoY to Rs 3,556 crore. The lender reported a 39% y-o-y jump in its pre-provisioning operating profit (PPOP) to Rs 5,567 crore. PPOP improved on account of a 13% rise in non-interest income, despite a fall treasury income, which was offset by fee income and recoveries.
The bank saw a 61 basis points expansion in its global net interest margin (NIM) to 3% as of September 30, owing to a significant improvement in its yield on advances. Net interest income (NII) improved 30% to Rs 8,271 crore, led by domestic advances.
The bank saw a 17% y-o-y growth in its retail advances to Rs 1.6 trillion and a 14% increase in its corporate portfolio to Rs 3.7 trillion. The bank’s global deposits grew 7% y-o-y to Rs 1.2 trillion. Current account, savings account (CASA) ratio of the bank fell to 44.91% as of September 30, from 45.42% a year ago. The bank’s capital adequacy ratio fell to 14.72%, against 15.20% a year ago.
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Gross non-performing asset (NPA) ratio of the bank contracted by 315 bps YoY and 79 bps sequentially to 10.48%, while the net NPA ratio fell by 169 bps YoY and 48 bps Q-o-Q to 3.80%. The provision coverage ratio improved by 319 bps to 83.96% as of September 30. Fresh slippages fell by 30% to Rs 5,301 crore in Q2FY23.