PNB back in black with Rs 247 crore Q3 net

New Delhi: PUNJAB National Bank on Tuesday reported a surprise seven percent year-on-year (YoY) jump in net profit at Rs 246.5 crore for the third quarter ended December 2018, driven by fall in provisions keeping behind the two billion dollar Nirav Modi fraud that shook it in the first quarter of the 2018 calender .

The bank has made quick turnaround in most of the key indices. The net interest income (NII) rose around 8 per cent at Rs 4,290 crore against Rs 3,989 crore that the lender reported last year.

On the asset quality front, gross non-performing assets (NPAs) stood at Rs 77,733 crore against Rs 81,251 crore that was reported during the previous quarter. Net NPAs have fallen to Rs 35,675 crore from Rs 38,279 crore last year.

PNB, India’s secondlargest state-run lender by assets, had reported losses for three straight quarters following the scam, on account of higher provisions.

This included the biggest ever quarterly loss for an Indian bank recorded by PNB in the March quarter last year.

“We are back in (the) black, after 100 per cent provisions for all our commitments,” PNB chief executive (in pic) Sunil Mehta told an earnings briefing. The Bank reported lower slippages at Rs 3,300 crore and so provisioning has come down. He told Financial Chronicle there is turnaround on every point. PNB housing arm’s stake sale is also on the cards. The impact of provisioning for the (Nirav Modi) incidence is already over.

We have factored Rs 2000 crore of provisioning during the current quarter also.

We will not be required to make that provisioning. We will get a write-back from resolution of these assets under IBC.

If we are able to sell off PNB Housing that will be add-on. So non-core assets divestment, resolution of these assets, “I am confident of repeating this performance even in a better way in the fourth quarter”, he said. He further informed in the last two quarters including the third one there was a need for provisioning for the one-off incidence. “But if it is taken off, we are profitable by Rs 2000 crore. Our provision coverage ratio on NCLT cases is 75 per cent”, he said.

He said the bank had a exposure to IL&FS is low. During the current quarter, it is classified Rs 331 crore as NPA and we have made provision for that one. And for the DHFL which is also under the fund diversion controversy, it is a standard account. Mehta was not worried on the issues coming from the possible NNPA level on MSME loans and Mudra loans. He said NPA level under the MSME level is 14 per cent and it 12 per cent for Mudra.