PNB Q3 Earnings: Net rises 7% amid higher recoveries, lower provisioning

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Mumbai | Published: February 6, 2019 4:50:33 AM

PNB, which was involved in a Rs 14,356-crore scam by Nirav Modi, had reported net profit of Rs 230.11 crore during the corresponding quarter in the previous financial year.

PNB Q3 Earnings, NPA, NCLT accounts, nirav modi, Brady House branch, RBI, Sunil MehtaPNB managing director and CEO Sunil Mehta said the company’s financial numbers are back in black. (PTI)

State-run Punjab National Bank (PNB) on Tuesday reported a 7.12% increase in net profit at Rs 246.51 crore for the third quarter ended December 31, 2018, driven by recoveries of Rs 16,600 crore between April and December and lower provisioning for bad loans.

PNB, which was involved in a Rs 14,356-crore scam by Nirav Modi, had reported net profit of Rs 230.11 crore during the corresponding quarter in the previous financial year. The country’s second-largest state-run lender by assets, had reported a record loss of Rs 4,532.4 crore in Q3FY18.

Net interest income (NII) of the lender rose by 7.6% year-on-year (y-o-y) to Rs 4,290.1 crore during the quarter.
PNB managing director and CEO Sunil Mehta said the company’s financial numbers are back in black.“We have honoured all our commitments. Our bank, as on date, has provided all for that incident (Nirav Modi fraud). We suffered because of the one-off incident which has now been absorbed by the bank,” Mehta said.

The bank’s asset quality increased as the gross non-performing assets (NPA) reduced by 83 basis points (bps) quarter-on-quarter (q-o-q) to 16.33%. The provision coverage ratio of the bank was at 68.85% in Q3FY19 as against 66.92% Q2FY19. The bank’s overall exposure to national company law tribunal (NCLT) accounts, as on December 31, 2018, was at Rs 36,367 crore.

Stressed assets of the lender reduced by 5.7% q-o-q to Rs 84,732 crore during the quarter. Net NPA was down 68 bps at 8.22% for Q3FY19. Fresh slippages for Q3FY19 was down 25.7% q-o-q at Rs 3,324 crore. The net interest margin stood at 2.64% for the quarter. Provisions and contingencies were down 38.3% y-o-y at Rs 2,753.8 crore. The bank’s per-provisioning profit fell by 27% y-o-y to Rs 3,099.86 crore, while it rose 9.2% from the previous quarter, as the bank had a write back on provisions of Rs 162.84 crore for 22 borrowal accounts under provisions of insolvency and bankruptcy code (IBC) and reserve bank of India (RBI) directions. Total provisions made for these accounts during the quarter was at Rs 10,573.3 crore.

“RBI had given dispensation to the bank to make provisions against the Brady House Mumbai branch fraud at 25% without debiting other reserves in the quarter ended March 31, 2018, and to provide remaining amount during first three quarters of the ensuing financial year,” the lender said in a statement. During Q3FY19, bank has made provision of Rs 2,014.04 crore, for the fraud of Rs 14,356.84 crore, under gems and jewellery sector, thereby making full provision for the fraud at Brady House branch as per terms of RBI’s dispensation, the lender added.

(With PTI inputs)

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