Punjab & Sind Bank Q1 Net profit falls 25%


Public sector lender Punjab & Sind Bank (PSB) on August 5 reported a 25.4 percent fall in net profit to Rs 152.67 crore for the April-June quarter of FY24, as against Rs 204.7 crore last year.
During the quarter, the lender earned an interest income of Rs 2,316 crore compared to Rs 1,800 crore in the year-ago period, as per a regulatory filing.


The bank's gross non-performing assets (GNPAs) declined to 6.80 percent from 11.34 percent in the June quarter of the previous fiscal. Net naon-performing assets (NNPAs) fell to 1.95 percent from 2.56 percent.The bank's net interest margin (NIM) in the quarter increased to 2.63 percent from 2.53 percent a year ago.Total income increased to Rs 2,494 crore in the first quarter of 2023-24 against Rs 1,915 crore a year ago.


Explaining the reason for the decline in profit, Punjab & Sind Bank's Managing Director Swarup Kumar Saha said the bank has made a Rs 57 crore provision towards the wage revision under negotiation and Rs 450 crore in fresh slippages, including a mid-corporate of Rs 92 crore in the quarter.


With regard to business growth, Saha said credit growth is expected to be 13-14 percent, while deposit mobilisation would witness a growth of 8-10 percent during the current fiscal.

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Punjab & Sind Bank reports 32% growth in Q4 PAT

 


Punjab & Sind Bank showed a mixed performance in the fourth quarter of FY23. The lender posted double-digit growth of 32.03% YoY and 22.43% QoQ in net profit to 
Rs.456.99 crore in Q4FY23. On the contrary, the bank's net interest income (NII) dipped by 1.97% YoY and sharply by 15.05% QoQ to Rs.683.78 crore in the quarter.

The growth in net profit was alongside narrowing in provision losses.


In Q4FY23, the bank's provision and contingencies loss narrowed steeply to Rs.57.12 crore as against Rs.131.56 crore in Q4FY22 and ₹207.46 crore in Q3FY23.


Gross non-performing assets (GNPA) came in at 6.97% in Q4FY23 as against 12.17% in Q4FY22 and 8.36% in Q3FY23. Net NPA stood at 1.84% in the quarter under review, compared to 2.74% in Q4FY22 and 2.02% in Q3FY23.


In its financial report, Punjab & Sind Bank revealed that it surpasses the targets in Priority Sector Advance which stands at 54.99% and Agriculture Advance at 20.67% of ANBC, as on March 2023, against the regulatory target of 40% and 18% respectively.


Also, the bank's credit to small and marginal farmers stands at 11.06% of ANBC, against the regulatory target of 9.50%. While credit to weaker sections stood at 12.68% of ANBC, against the regulatory target of 11.50%.


Additionally, credit to micro enterprises stands at 14.31 % of ANBC as of March 31, 2023, against the regulatory target of 7.50%.


Further, as of March 2023, the bank has 19.30 lakh PMJDY accounts with a balance of deposits of Rs.558 crore.


As of March 31, 2023, the bank has 1537 branches, out of which 572 are Rural, 281 Semi-Urban, 362 Urban, and 322 Metro along with 835 ATMs, and 357 Business Correspondents.


Recently, the lender opened 25 new branches in PAN India --- taking the total number of branches to 1553 as of date.


In a meeting held on Tuesday, the bank's board members recommended a dividend of Rs.0.48 per share or 4.80% having a face value of Rs.10 each to shareholders.

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Punjab & Sind Bank net profit up 17.82%

 


Punjab & Sind Bank (PSB), a public sector bank, on Monday reported a 17.82 per cent increase in net profit for Q1 ended June 30, 2022 at Rs.205 crore.


However, the latest bottomline performance was 41 per cent lower than the net profit of Rs.346 crore recorded in Q4FY22.


Asked as to why the bank faced sequential decline in profits in Q1FY23, Swarup Kumar Saha, Managing Director & CEO, PSB said the performance for the quarter under review was weighed down by a marked-to-market loss of Rs.109 crore. He highlighted PSB had in Q!FY22 recorded treasury gain of Rs.130 crore.


This is the first quarter (June 2022) that the bank faced overall treasury loss largely due to spike in G-sec yield rates in the system. From April this year onwards, there has been an increase in interest rates, largely resulting from tightening of monetary policy by the RBI.


Despite the bank taking a MTM loss of Rs.109 crore in Q1, Saha expressed confidence that it would be able to this fiscal achieve bottomline of about Rs.1039 crore — the same level as recorded in 2021-22.


Saha said he was giving a somewhat muted profit guidance primarily on account of uncertainty in how interest rates will move in coming days and the MTM impact that it could have on the balance sheet.


“Every bank has had to face impact of MTM loss in the June quarter. This has been across the industry. We too had to face this. We have booked the entire amount (MTM loss) as RBI has not permitted banks to stagger it. As of now, we feel we are adequately cushioned. We feel the impact would not be substantial incrementally from June onwards”, Saha said post the announcement of Q1 results of the bank.


It maybe recalled that PSB had last fiscal staged a turnaround and reported a net profit of Rs.1,039 crore.


On capital raising, Saha said the bank was adequately capitalised for now, but may go in for some capital mop up in Q4FY23.


He said PSB is looking to transfer five non-performing assets (NPA) accounts amounting to Rs.528 crore to the newly set up, National Asset Reconstruction Company Ltd (NARCL).Total income of PSB for Q1FY23 stood at Rs.1915 crore.


Saha said the bank was aiming to bring down the gross NPA, which stood at 11.34 per cent now, to below 10 per cent by end March 2023. Net NPA, which was at 2.56 per cent as of June 2022, would be brought below 2 per cent as of end March 2023, he added. PSB was eyeing retail credit growth of 15 per cent this fiscal.

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Punjab & Sind Bank Q1 results: reports net profit

 


State-owned Punjab & Sind Bank on Thursday reported a net profit of Rs 173.85 crore for the first quarter ended June 30. The bank had posted a net loss of Rs 116.89 crore a year ago. Sequentially, it had registered a net profit of Rs 160.79 crore in the March 2021 quarter.


The total income of the bank during Q1FY22 rose to Rs 2,039.61 crore from Rs 1,954.39 crore in Q1FY21, Punjab & Sind Bank said in a regulatory filing.Provisions for bad loans and contingencies for the quarter fell to Rs 77.30 crore from Rs 382.56 crore in the year-ago period.


The bank's asset quality showed an improvement and the gross non-performing assets (NPAs or bad loans) came down to 13.33 per cent of the gross advances as of June 30, 2021, against 14.34 per cent a year ago.In absolute value, the net NPAs stood at Rs 9,054.96 crore, up from Rs 8,848.06 crore.


The net NPAs ratio fell to 3.61 per cent (Rs 2,206.70 crore), from 7.57 per cent (Rs 4,326.41 crore).The bank said it has kept the account of Delhi Airport Metro Express Pvt Ltd (DAMEPL) as standard, in accordance with the Supreme Court order and RBI guidelines.


The bank has not treated an outstanding of Rs 166.63 crore towards DAMEPL as NPA, it said. It has held the provisions of Rs 92.24 crore against this, higher than the required Rs 49.59 crore.The provision coverage ratio of the bank stood at 84.22 per cent as of June 30, 2021, and the liquidity coverage ratio at 215.52 per cent.

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Another Privatisation news- Two of these three banks are likely privatisation candidates


The market is betting on Punjab & Sind Bank, Bank of Maharashtra and Bank of India as the likely candidates for the finance minister’s ambitious bank privatisation plan. In her Budget speech, finance minister Nirmala Sitharaman said the government planned to privatise two sate-run banks, other than IDBI Bank. Analysts believe that the likely candidates will be from the pool of banks which were not part of the merger process. The government had earlier allowed merger of 13 banks into five banks.

Anil Gupta – vice-president and sector head, financial sector ratings, ICRA, said Punjab and Sind Bank and Bank of Maharashtra looked probable candidates for privitisation. Of the six banks kept out of merger, Indian Overseas Bank, Central Bank and UCO Bank are under PCA (prompt-corrective action), he explained. The Reserve Bank of India had kept the three banks in the PCA framework after a massive asset quality deterioration, losses in the books and lower capital levels. Gupta said PCA banks were unlikely to be offered for privatisation due to poor investor demand.

Leaving State Bank of India and five merged banks, there are six public sector banks in the banking system. The six banks include Bank of India, Punjab and Sind Bank, Bank of Maharashtra, Indian Overseas Bank (IoB), Central Bank of India and Uco Bank. Gupta also said the government was unlikely to consider privitisation of Bank of India due its large size. “The government may want to test the water with smaller banks first,” he added.

According to JM Financial, “While the details are awaited, we believe the most likely candidates will be from the pool of banks which were not part of consolidation. While these candidates are small and are not expected to provide any material resources to the government, we believe that this is a step in the right direction and can act as a test case for privatisation of other major public sector banks in future.”

In a note to its clients, Kotak Institutional Equities said the task of privatising two PSU banks may be difficult to achieve but could result in more privatisations, if successful. Lack of interest among potential buyers remains a key concern given the structure of these banks, Kotak said.

In an interview with CNN News 18, Niramala Sitharaman said the government wanted more public sector banks which are functionally strong, professionally managed and can meet the demands of growing aspirational India. “If I am going to be sitting around with such public sector banks which are just not in a mood or a position to stand up, is it right to pour tax-payers money into such banks? When there may be buyers who can buy and run it efficiently,” she said.

The government has proposed to introduce required legislative amendments for privatisation of two PSBs in the Budget session itself.

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Punjab & Sind Bank declares Sintex Industries account as Defaulter

 


State-owned Punjab & Sind Bank on Thursday said it has declared the account of Sintex Industries with the total outstanding of Rs 294 crore as fraud and reported the same to the RBI.

With regard to the bank's policy on determination and disclosures of material events, it is informed that an NPA account Sintex Industries Ltd with outstanding dues of Rs 294.49 crore has been declared as fraud, the Bank said in a regulatory filing.

The lender said it has made provisioning of Rs 147.25 crore against this fraud account.

It has been reported to the Reserve Bank of India (RBI) today as per regulatory requirement, Punjab & Sind Bank said.

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Eye on this PSBs to be privatise: Govt mulls corporate, foreign bank participation

 


Indian policymakers are discussing ways to open up the banking sector via easing norms for corporate and foreign bank participation in acquiring public sector banks that the central govt is looking to privatise, sources with knowledge of the matter told ET Now.

Currently, industrial houses that have less than 60% of their turn over from non-financial entities are not allowed to apply for bank licences and their equity participation is also limited to 10%, as regulators have feared that this could risk financial stability because of the propensity of the corporates to milk banks for ‘self-loans.’

ET Now learns that there’s a rethink on the existing policy between policymakers even as the discussions are at an “early stage”. Sources say the government and the central bank may move with “abundant caution” and will take into account global experience and prior experience as well. 

Greater regulatory vigilance in terms of preferring corporate players with a long term 10-year business plan, “Fit & Proper Criteria” for corporate participation for taking equity in banks, tighter norms for related party transactions could be put in to ensure no excessive concentration or risks to financial stability. 

"We need to open up the banking system but the move will be designed with “abundant caution” and will need stonewalling from misuse. Opening up banking sector will come with greater regulatory vigilance on banks, fin institutions," one of the officials told ET Now.

Policymakers are also discussing allowing foreign banks with Indian subsidiaries to participate in buying government stake when state-owned banks like Central Bank of India, Bank of India, Punjab and Sind Bank, IOB and UCO Bank are privatised. 

The banking sector has been plagued with rising bad loans leading to decline in capital adequacy ratios and in some cases failure. Recently, Yes Bank was saved through government and RBI intervention when SBI lead consortium infused more capital into the private lender to save it from bankruptcy. Last week the government and RBI had to intervene to aid the rescue of Lakshmi Vilas Bank by the Indian subsidiary of DBS Bank, a move that reflected a change in thinking of the central bank and the government. 

Besides DBS, there are only one other foreign bank that has Indian subsidiaries -- SBM Bank. SBM Bank (India) Limited (Subsidiary of SBM Group) and DBS Bank India Limited have been issued licence on December 6, 2017, and October 4, 2018, respectively for carrying on banking business in India through a wholly-owned subsidiary. 

The widening of this move to allow foreign banks to buyout public sector banks when the government decides to privatise them will not only increase competition in the sector leading to efficiency but will also make a paradigm shift in the sector. The larger aim is to make Indian banks globally competitive. 

The discussion on this is at early stage but the policy could be timed with the government's larger privatisation policy that will allow selling of some Indian public sector banks. Bank of India, Central Bank of India, Bank of Maharashtra, Punjab & Sind Bank are some of the state-run lenders that the government is looking to privatise.

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Punjab & Sind Bank Q1 net loss widens on mounting bad loans


Punjab & Sind Bank (PSB) on Friday said its net loss widened to Rs 116.89 crore in the first quarter ended June 30, mainly due to mounting bad loans.

The city-headquartered lender had reported a net loss of Rs 30.28 crore during the same quarter a year ago. Sequentially, it had registered a net loss of Rs 236.30 crore in the fourth quarter last fiscal.

The total income of the bank also fell to Rs 1,954.39 crore in April-June, as against Rs 2,237.91 crore in same period of 2019-20, the bank said in a regulatory filing.

Interest income declined to Rs 1,800.02 crore from Rs 2,070.94 crore.

The lender witnessed deterioration in its asset quality as the gross non-performing assets (NPAs) swelled to 14.34 per cent of the gross advances as on June 30, 2020, compared to 12.88 per cent a year ago.

In absolute value terms, the gross NPAs or bad loans were at Rs 8,848.06 crore, compared to Rs 8,885.86 crore.Net NPAs, however, were down at 7.57 per cent (Rs 4,326.41 crore), as against 7.77 per cent (Rs 5,062.36 crore).

The bank''s provisions for bad loans and contingencies for June quarter of FY21 were raised to Rs 382.56 crore from Rs 334.53 crore.The bank''s provision coverage ratio and liquidity coverage ratio as on June 30, 2020 stood at 69.20 per cent and 220.80 per cent, respectively.

On COVID-19 related moratorium provisions, the bank has made provision of Rs 100 crore as per the RBI guidelines, which is more than minimum, it said.
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Privatization Of PSU Banks, Insurance Starts Soon


Privatization of the PSUs will now be resumed by the Government of India and about four unmerged banks and insurance companies will be privatized in the next part of the project.


The privatization of PSU Banks was postponed in 2020 due to the outbreak of the Coronavirus pandemic, which put the whole process on hold because of their low valuations and mounting stressed assets.

As per reports, Punjab & Sind Bank, IOB, Bank of Maharashtra might be privatized, along with state-run insurance companies, such as National Insurance Company, United India Insurance, and Oriental Insurance Company.

Prior to this, the Government had also sold their shares in the Bharat Petroleum Corp Ltd (BPCL), Shipping Corp of India (SCI), THDC India, and NEEPCO. The Govt also announced that it will also sell its 30% stake from the state run rail hauler Container Corp of India (Concor).

Recently, the Government of India had also announced economic reforms in wake of the Coronavirus pandemic, wherein it was declared that every PSU in India will be now privatized, except 4 in strategic sectors.

As per reports, a draft cabinet note has already been sent for inter-ministerial consultations to identity strategic and non-strategic sectors. 

A government official close to the development said, “A broader policy will look at sectors that have market imperfections due to the government’s presence, where the private sector can take the lead and ensure that the monopoly should not happen due to state-run companies.”

He also said that sectors like banks, insurance, space, defence will be privatized.


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Punjab & Sind Bank posts net loss in Q3


Punjab & Sind Bank on Monday reported a net loss of Rs 255.49 crore for the quarter ending December due to a spike in bad loans.

The state-owned lender had made a net profit of Rs 22.34 crore during the same quarter of the previous fiscal year.

Total income during the third quarter of 2019-20 declined to Rs 2,077.01 crore from Rs 2,337.13 crore for the year ago same period, the bank said in a regulatory filing.

Bad loans or non-performing assets (NPAs) of the bank showed deterioration as gross NPAs jumped to 13.58 per cent of gross advances by the end of December 2019 as against 11.19 per cent by the same period of 2018.

In value-terms, gross NPAs were Rs 8,923.49 crore by end-December, higher than Rs 7,990.67 crore at end-December 2018.

Net NPAs too increased to 8.71 per cent (Rs 5,417.79 crore) from 6.90 per cent (Rs 4,696.47 crore).

Provisions for bad loans during the quarter increased to Rs 464.01 crore as against Rs 453.88 crore the bank had parked aside in the year ago quarter.

The bank is carrying a provision of Rs 11.52 crore as against the outstanding balance of Rs 230.40 crore as at December 31, 2019 being 5 per cent of outstanding food credit availed by Punjab as per the RBI letter issued to SBI, the lead bank.
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Punjab & Sind Bank Q1 result, net loss narrows

Punjab & Sind Bank on Wednesday said its first quarter net loss narrowed on the back of lower provisioning and higher other income.
The bank posted a net loss of Rs.30 crore for the three months ended 30 June compared to a loss of Rs.398 crore in the year-ago period.
Provisions during the quarter decreased 67.37% to Rs.334.5 crore as against Rs.1,025 crore in the year-ago quarter. In the January-March quarter, the bank had set aside Rs.433.76 crore in provisions.
Other income, which includes core fee income, increased 10.39% to Rs.167 crore in the quarter as compared to Rs.151.25 crore a year ago.
Net interest income, or the difference between interest earned on loans and that paid on deposits, decreased 20.14% to Rs.567.59 crore from Rs.710.73 crore in the corresponding period last year.
Gross non-performing assets (NPAs), as a percentage of total advances, were at 12.88% in the June quarter compared with 11.83% in the March quarter and 10.55% in the year-ago June quarter.
Post-provision, the net NPA ratio was at 7.77% as against 7.22% in the January-March quarter and 5.92% in the year-ago quarter.
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Punjab & Sind Bank loss narrows in Q4FY19


State-owned Punjab & Sind Bank Friday said it has narrowed its net loss to Rs 58.57 crore in the March 2019 quarter, aided by lower provisioning.



The bank had posted a loss of Rs 524.62 crore in the corresponding quarter of the previous financial year. 


However, there was a net profit of Rs 22.34 crore in the preceding quarter ended December 2018.


Its total income in the quarter rose to Rs 2,304.37 crore, from Rs 2,337.13 crore in the year-ago period.


The asset quality of the bank witnessed worsening, as the gross non-performing assets (NPAs) rose to 11.83 per cent of gross advances at the end of March 2019 as against 11.19 per cent a year ago.




The net NPAs stood at 7.22 per cent, higher than 6.93 per cent at the end of March 2018.


In absolute terms, the gross NPAs were Rs 8,605.87 crore by the end of 2018-19, while it was at Rs 7,801.65 crore a year ago. Net NPAs were at Rs 4,994.23 crore as against Rs 4,607.87 crore.




Provisions for bad loans stood at Rs 312.09 crore for the March 2019 quarter, compared with Rs 768.36 crore in the year-ago period.



The bank said it was able to arrest yearly loss to Rs 543 crore against Rs 744 crore in 2017-18 due to improved operating profit and over 42 per cent growth in non-interest income.





Return on assets has also improved to (-) 0.47 per cent in 2018-19, compared with (-) 0.69 per cent of previous year, it said in a release.





Provision coverage ratio has improved to 59.46 per cent at the end of March from 54.41 per cent a year ago, it added.
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Punjab & Sind Bank reports net profit in Q3FY19

State-owned Punjab & Sind Bank on Tuesday reported a net profit of Rs 22 crore in the third quarter ended December 2018. It had reported a loss of Rs 258 crore in the corresponding period of 2017-18, according to a release by the company.
The bank's total income increased during the quarter to Rs 2,337.13 crore as against Rs 2,178.69 crore in the corresponding period of 2017-18.

Gross non-performing assets (NPAs) rose to 11.19 per cent of the gross advances at the end of the quarter, against 10.95 per cent in the year-ago period.
However, net NPAs declined to 6.90 per cent, compared with 7.20 per cent a year ago.
As a result, provisions for bad loans increased to Rs 453.88 crore during October-December 2018, against Rs 417.51 crore in the third quarter of the previous fiscal.
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Modi govt may merge these three PSBs to create giant PSU lender

The government is weighing the possibility of the next phase of consolidation in the public sector banking space by amalgamating three lenders —Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and Punjab & Sind Bank (P&SB), sources told FE.

“An inter-ministerial group (called Alternative Mechanism) under Union minister Arun Jaitley will take a final call on this plan. The (merger) option is on the table but whether the government is going to bite the bullet ahead of polls and announce amalgamation or choose to wait is yet to be seen,” said one of the sources.

While the headquarters of PNB and Punjab & Sind Bank are in Delhi that of OBC is in Gurugram (Haryana).,

The amalgamation, if approved, will be a part of the government’s efforts to create a few but strong banks with much larger balance sheets to support the rising appetite for credit of the fast-growing economy and enable optimum utilisation of resources. Upon amalgamation, the merged entity will have a combined business of over Rs16.5 lakh crore, deposits of Rs9.6 lakh crore and advances of close to Rs7 lakh crore, said the sources.

It will pip Bank of Baroda (into which Vijaya Bank and Dena Bank have recently merged) to become the second biggest public sector bank.

The net NPA ratio of PNB and OBC stood at 8.22% and 7.15%, respectively, as of December quarter, having improved from 11.24% and 10.48% at the end of March 2018.

PNB surprised analysts by recording a 7% rise in net profit in the three months through December 2018 following losses in three previous quarters. The Reserve Bank of India (RBI) last week lifted various restrictions on OBC, which had been under the prompt corrective action (PCA) framework since October 2017. Although Punjab and Sind Bank has witnessed losses in the first two quarters of this fiscal, on top of the losses in the last fiscal, it hasn’t made into the central bank’s watch list and its net non-performing asset (NPA) ratio of 5.25% is relatively decent.

The successful experience of merging State Bank of India with five of its subsidiaries and Bharatiya Mahila Bank, and the amalgamation of Bank of Baroda, Vijaya Bank and Dena Bank have given the government confidence that another round of consolidation can be handled without hiccups. However, given that PNB, OBC and Punjab & Sind Bank, while witnessing an improvement in their finances are not out of the woods yet, the government may choose to wait until their recovery takes roots, said another source.


Presenting the Interim Budget 2019-20, finance minister Piyush Goyal said: “Amalgamation of banks has also been done to reap the benefits of economies of scale, improved access to capital and to cover a larger geographical spread.”

Source - The Financial Express
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Punjab & Sind Bank reports net loss in Q2

State-owned Punjab & Sind Bank Tuesday reported a net loss of Rs 109.23 crore in the second quarter ended September 30, on higher bad loans provisioning. It had posted a net profit of Rs 13.70 crore in the corresponding quarter of the previous financial year, the bank said in a regulatory filing.

However, the lender reduced its losses when compared sequentially against Rs 398 crore in the first quarter ended June of the current fiscal. Its total income increased to Rs 2,409.41 crore during the quarter, against Rs 2,166.64 crore a year ago.


The bank's provisioning for bad loans or non-performing assets (NPAs) rose to Rs 400.90 crore for the quarter, from Rs 277.36 crore in the year-ago period. The overall provisioning and contingencies during the period were up at Rs 593.73 crore from Rs 294.83 crore a year ago, the bank said.

On asset front, gross NPAs showed improvement at 10.02 per cent of the gross loans, against 11.25 per cent at the end of September 2017. Net NPAs were 5.25 per cent of the net advances, down from 7.72 per cent a year ago.


In value terms, the bank's gross NPAs stood at Rs 7,202.17 crore by the end of September, against Rs 6,821.51 crore by September 2017. Net NPAs stood at Rs 3,583.37 crore, compared with Rs 4,501.94 crore.

The provision coverage ratio and liquidity coverage ratio were 64.79 per cent and 144.31 per cent, respectively, the bank said. 
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Punjab & Sind Bank reports net loss in Q1



State-owned Punjab & Sind Bank on Wednesday reported a net loss of Rs 398 crore in first quarter ended June as provisioning for bad loans increased significantly.It had reported a net profit of Rs 25.37 crore in the same period a year ago. In the preceding quarter ended March 2018, it had a net loss of Rs 524.62 crore, a dip in losses when compared sequentially.

For the entire 2017-18, the bank had posted a net loss of Rs 743.80 crore due to high proportion of bad loans.The bank in a regulatory filing said that the total income in April-June period of 2018-19 stood at Rs 2,336 crore, higher than Rs 2,062.57 crore in the same period of 2017-18.

For the June quarter, bank's provisioning for bad loans (or non-performing assets) shot up to Rs 795.38 crore as against Rs 259.20 crore set aside for the same period of the fiscal ended March 2018.
However, the bank brought down the proportion of soar assets with the gross NPAs falling to 10.55 percent of gross advances as on June 30, 2018 from 11.33 percent in year ago corresponding quarter.In value terms, gross NPAs stood at Rs 7,363.41 crore by end June this year as against Rs 6,693.36 crore. Net NPAs were 5.92 per cent (Rs 3,928.81 crore) as against 7.94 per cent (Rs 4,511.40 crore).


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New Chairpersons appointed for three PSU banks

The Narendra Modi government today appointed non-executive chairpersons for three state-run banks.
Charan Singh, the RBI chair professor at the Indian Institute of Management, Bangalore, has been appointed as the non-executive chairman of Punjab & Sind Bank, Financial Services Secretary Rajiv Kumar tweeted.
Anjali Bansal, the former managing director of TPG Private Equity, has been appointed at Dena Bank, while Tapan Ray, the former corporate affairs secretary, will take charge at Central Bank of India. The three appointees will be part-time non-official directors on the boards of the three public sector banks.

The appointments have been made based on the suggestions of Banks Board Bureau headed by Bhanu Pratap Sharma, Kumar tweeted.

The government has been experimenting with appointing experts from a variety of fields as chairpersons of public sector banks. In 2015, Ravi Venkatesan had been appointed as the non-executive chairperson of Bank of Baroda. In the same year, G Padmanabhan, former executive director of the RBI had been appointed as chairperson of Bank of India.
This is a move towards separating the responsibility between chairman and managing directors for better functioning of public sector banks, Kumar said while announcing the fresh appointments on Thursday.
Each of the three banks where new chairpersons have been appointed are grappling with stress.
Dena Bank, for instance, was recently told to stop fresh lending by the RBI. The bank reported a gross non performing assets ratio of 22 percent as of March 2018. Central Bank of India, too, had a bad loan ratio close to that of 21 percent. Punjab and Sind Bank is in a marginally better position with a bad loan ratio of 11 percent.
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Punjab Sind Bank Q4 result, reported net loss as NPA provision rises

State-run Punjab and Sind Bank today reported a net loss of Rs 524.62 crore for the last quarter of 2017-18 due to a significant rise in provisioning for bad assets.

The bank had posted a neoss to bt profit of Rs 8.33 crore in the same period of 2016-17. The bank had suffered a net loss of Rs 258.25 crore in third quarter ending December.Income remained almost flat at Rs 2,122.05 crore in the quarter against Rs 2,110.11 crore in the same period of last year.

The provisioning for bad loans increased to Rs 738.36 crore for the quarter as against Rs 464.51 crore in the same quarter of the previous fiscal, according to a regulatory filing by the bank.For the full 2017-18 fiscal, the bank reported a loss of Rs 743.80 crore against a net profit of Rs 201.08 crore in the fiscal ended March 2017.


Income for the year fell to Rs 8,529.95 crore from Rs 8,750.97 crore a year ago.The NPA provisioning increased to Rs 1,722.43 crore from Rs 1,106.33 crore in the year ago fiscal.

The bank said the board of directors at its meeting held today has not recommended any dividend for the financial year 2017-18. Bank's gross non-performing assets (NPAs) or bad loans surged to 11.19 per cent of the gross loans as on March 31, 2018 from 10.45 per cent as on March 31, 2017. In value terms, gross NPAs stood at Rs 7,801.65 crore against Rs 6,297.59 crore.

Net NPAs were down at 6.93 per cent (Rs 4,607.87 crore) from 7.51 per cent (Rs 4,375.08 crore). The lender said it was required to make additional provisions in case of six borrowal accounts covered under the Insolvency and Bankruptcy Code (IBC).

"Similarly... In respect of five borrowal accounts covered under the process of Insolvency and Bankruptcy Code (IBC), the Bank was required to make additional provision," it added.
It further said that even as the provisioning requirement in respect of NCLT account has been reduced from 50 per cent of secured portion to 40 per cent of secured portion as on March 31,2018, the bank has however not exercised the option of dispensation available in respect of old accounts in which provision of 50 per cent was already held by bank upto Dec 2017 quarter.

The Bank has availed the option of provisioning requirement in respect of 2 NCL T accounts admitted during the quarter ending March 2018 by providing 40 per cent provision in said accounts, it said.


Also, in view of fraud reported during the year in certain banks in respect of one gems and jewellery borrower, the Bank has classified the account as NPAs and provided fully, it added.On divergence in asset classification and provisioning for NPAs as per Risk Assessment Report of RBI, the bank has shown a gap of Rs 542.70 crore in gross NPAs and Rs 217.50 crore in net NPAs for 2016-17.

Taking into account the Rs 217.50 crore divergence in provisioning for NPAs, the adjusted net profit for fiscal ended March 2017 has come down to Rs 58.85 crore.The bank had earlier reported net profit of Rs 201.08 crore for that year. The provision coverage ratio and liquidity coverage ratio as at 31 March 2018 works out to 54.31 per cent and 102.87 per cent respectively, the bank said.
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Five banks may be put under RBI's prompt corrective action(PCA) plan

  

Canara bank and Union Bank of India are among five public sector banks that might be put under the Reserve Bank of India's prompt corrective action plan. According to ICRA ratings show the net non-performing assets (NPAs) of these five banks rose above 6 per cent in December 2017.

If the banking regulator places them under PCA, the action may drive these banks to recall additional tier-1 (AT-1) bonds, which is included in Tier-1 capital, of Rs 157 billion from investors.Apart from Canara bank and Union bank, the other PSBs that might come under PCA are Andhra Bank, Punjab National Bank, and Punjab & Sind Bank.

According to ICRA, over the past 4 years, PSBs have raised AT-I bonds totalling Rs. 603851 crore to shore-up their Tier-I capital ratios in the backdrop of losses, increasing capital requirements under Basel III and limited capital infusion by the Government of India (GoI) in relation to their requirements. "Inclusion in PCA, coupled with recapitalisation of PSBs by the government has triggered a 'regulatory event' and an early recall of AT-I bonds" by these banks, says the report. 

RBI earlier stated that the PCA framework was intended to encourage banks to eschew certain riskier activities and focus on conserving capital so that their balance sheets can become stronger. The PCA framework would apply without exception to all banks operating in India, including small banks and foreign banks, operating through branches or subsidiaries based on breach of risk thresholds of identified indicators.

A bank will be placed under the PCA framework based on the audited Annual Financial Results and the Supervisory Assessment made by RBI. Last year in December, RBI initiated PCA against Bank of India (BOI) for mounting of bad loans placing various restriction on the bank including issuance of fresh loans and dividend distribution. The BoI would not be alone to face the RBI action as there are nine other such banks, mostly state-owned banks, for having higher stressed assets. They include IDBI Bank, Indian Overseas Bank, Bank of Maharashtra, United Bank of India, Dena Bank, Corporation Bank, UCO Bank, Central Bank of India and Oriental Bank of Commerce. In June 2017, RBI gave similar clarifications while initiating banks under the PCA framework. 

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Punjab & Sind Bank Q3 result, reported loss

Public sector Punjab and Sind Bank has reported a net loss of Rs 258.25 crore in the third quarter ended December 2017, owing to over two-fold jump in NPA provisioning. It had reported a net profit of Rs 77.51 crore in the corresponding October-December period of 2016-17.

Operating profit of the bank, however, was up at Rs 353.13 crore for the December quarter of 2017-18 against Rs 277.10 crore in the same period a year ago, the bank said in a regulatory filing.
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