Public sector lender Punjab National Bank 's (PNB) first quarter profit plunged by 57.5 percent to Rs 306.4 crore on yearly basis but the fall was much less compared to analysts' expectations. Higher other income and lower tax cost supported profits Net interest income, the difference between interest earned and interest expended, declined 9.8 percent to Rs 3,699 crore compared with year-ago period, impacted slow loan growth. Advances increased 2.8 percent year-on-year to Rs 3.9 lakh crore while deposits grew by 7 percent to Rs 5.5 lakh crore at the end of June 2016, aided by 14.1 percent growth in CASA deposits. Numbers were better analysts' expectations. Profit was estimated at Rs 9.1 crore and net interest income at Rs 3,572.7 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18. The bank has registered a solid 68.5 percent growth in other income (non-interest income) at Rs 2,355 crore while operating profit grew only by 4.5 percent at Rs 3,274.62 crore in Q1 on annual basis. Tax expenses slipped 61.7 percent to Rs 230 crore on yearly basis. Provisions for bad loans jumped 51.2 percent to Rs 2,738.4 crore in the quarter ended June 2016 compared with year-ago period but declined sharply 74 percent from Rs 10,485.2 crore in preceding period. Provision coverage ratio improved marginally to 52.5 percent from 51.1 percent on sequential basis.
Asset Quality Asset quality deteriorated further during the quarter due to slightly higher-than-expected fresh slippages. Gross non-performing assets (NPA) increased 85 basis points to 13.75 percent and net NPAs were up 55 basis points at 9.16 percent on a QoQ basis. In absolute terms, gross NPAs rose 1.5 percent quarter-on-quarter to Rs 56,654 crore and net NPAs 0.9 percent to Rs 35,728.5 crore in Q1FY17. Fresh slippages during the quarter stood at Rs 7,533 crore against Rs 23,545 crore in preceding period, Usha Ananthasubramanian, MD & CEO of the bank said while addressing press conference. She further said the restructured book was at Rs 19,000 crore at the end of June 2016 against Rs 20,144 crore in Q4FY16, adding recovery was Rs 6,000 crore and upgradation at Rs 1,181 crore during the quarter. At 13:24 hours IST, the scrip of Punjab National Bank was quoting at Rs 132.00, down Rs 0.75, or 0.56 percent on the BSE.
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