Punjab National Bank’s net profit fell 44% year-on-year in the December quarter due to a rise in provisions.
The bank posted a bottomline of Rs 629 crore in October-December, up 53.04% on a sequential basis.
The bank’s provisions rose nearly 41% y-o-y to Rs 4,713.3 crore. Provision coverage ratio rose by 332 basis points y-o-y to 85.17% as on December 31, the New Delhi-based bank said in a press release.
Gross non-performing asset ratio fell 312 basis points y-o-y to 9.76% as on December 31. Net non-performing asset ratio fell to 3.30% as on December 31 from 4.90% a year ago.
The bank expects to bring its gross non-performing asset ratio to 9% and its net non-performing asset ratio to 3% by March 31, managing director and chief executive officer Atul Kumar Goel said.
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Broadly, the bank aims to keep its credit cost at below 2% in this financial year.
Punjab National Bank’s global gross advances grew by 13.43% y-o-y to Rs 8.6 trillion as on December 31. Core retail credit grew 13.5% y-o-y to Rs 1.3 trillion.
Within retail credit, housing loans rose 9.2% y-o-y, vehicle loans rose 39.5% y-o-y, and personal loans rose 40.4% y-o-y. The bank aims to maintain its loan growth at 12-13% y-o-y in 2022-23(April-March).
Global deposits grew 7.37% y-o-y to Rs 12.1 trillion as on December 31. Savings deposits grew 4.04% y-o-y to Rs 4.5 trillion as on December 31.
The bank is targeting a deposit growth of 8-9% y-o-y in 2022-23.
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Net interest income rose 17.6% y-o-y to Rs 9,179 crore in October-December. Net interest margin rose by 23 basis points to 3.16% in the December quarter.
Going ahead, the bank expects its margin to slide to 3% due to the impact of the hike in deposit rates.
Capital adequacy ratio rose 24 basis points y-o-y to 15.15% as on December 31.
The bank has a total exposure of around Rs 7,000 crore to Adani Group. Of this, the bank has lent Rs 2,500 crore towards the group’s airport business.
The bank has invested Rs 42 crore in the group’s bonds.
“As on date, we do not worry about our exposure to the Adani Group because the exposure is not significant. Those accounts that have exposure are generating cash flow,” managing director and chief executive officer Atul Kumar Goel said.
Concerns around lender’s exposure to the group come at a time when Hindenburg Research has alleged that the group indulged in “stock manipulation and accounting fraud”.
The Adani group has denied all charges. The bank is keeping a close watch on developments on the Adani group.