State-run Punjab National Bank (PNB) has posted net loss of Rs 5,367.14 crore in January-March quarter, which is the highest ever loss reported by an Indian Bank, against profit of Rs 306.56 crore in year-ago period.
Sharp surge in provisions and weak asset quality hit profitability despite higher other income and big tax write-back. A 4.6 percent intraday rally in the stock could be on the view that the worst in terms of bad asset quality may be over for the time being.
Net interest income, the difference between interest earned and interest expended, plunged 27 percent to Rs 2,767.7 crore while other income (non-interest income) grew sharply by 35.8 percent to Rs 2,452.16 crore compared to corresponding period of last fiscal. Operating profit saw marginal increase at Rs 3,227.85 crore during the quarter compared to Rs 3,202.7 crore in same period last fiscal.
The country's second largest public sector lender disappointed on earnings front. Loss was expected at Rs 53 crore and net interest income was estimated at Rs 4,177 crore for the quarter, according to CNBC-TV18's consensus estimates.
Provisions increased nearly 3-fold to Rs 10,485.23 crore during the quarter compared to Rs 3,775.53 crore in preceding quarter and Rs 3,834.2 crore in corresponding period of last fiscal. Provision coverage ratio stood at 51.06 percent as on March 2016, falling significantly compared to 53.85 percent in December 2015 and 58.21 percent in March 2015.
Asset quality was pathetic in Q4 as gross non-performing assets (NPA) nearly doubled to 12.9 percent compared to 6.55 percent in year-ago period and jumped 443 basis points over preceding quarter.
Net NPA also more than doubled year-on-year to 8.61 percent during the quarter.
PNB said it has tax write-back of Rs 1,890 crore for the quarter against Rs 938 crore in year-ago period.
Deposits during the quarter grew by 10.3 percent YoY to Rs 5.5 lakh crore while advances increased by 8.3 percent to Rs 4.1 lakh crore. In FY16, the bank posted loss of Rs 3,974.4 crore against profit of Rs 3,061.6 crore in previous year.
Net interest income declined 7.5 percent to Rs 15,311.78 crore compared to earlier year. During the year, the bank has revalued its immovable properties and revaluation surplus amounting to Rs 1,477.86 crore credited to revaluation reserve.
At 13:02 hours IST, the scrip of Punjab National Bank was quoting at Rs 74.35, up Rs 0.55, or 0.75 percent amid high volumes on Bombay Stock Exchange.
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