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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