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PNB shares plunge 14% after Q4 loss, Jefferies suggests bailout

IANS  |  Mumbai 

Shares of multi-crore fraud hit (PNB) slumped around 14 per cent (intra-day) on Wednesday, a day after the reported a loss of over Rs 13,000 crore for the fourth quarter of 2017-18.

Looking at the bank's Q4 earnings, company said in a report that "the need for a bailout by the government is immediate."

The public sector on Tuesday had reported a net loss, after closing hours of the stock markets, of Rs 13,417 crore for quarter ended March, against a net profit of Rs 262 crore for the corresponding quarter in 2016-17.

The gross non-performing assets (NPA) of the company stood at 18.38 per cent for the fourth quarter of 2017-18 compared to 12.53 per cent during the corresponding quarter in 2016-17.

On Wednesday, the share price of the on the settled at Rs 75.55 -- down Rs 10.45 or 12.15 per cent -- from the previous close of Rs 86 per share.

PNB shares may take support around Rs 69 per share in the near term, said Deepak Jasani, of Retail Research,

"We will keep seeing intermittent bounces in the PSU stocks based on emerging newsflow," Jasani told IANS.

He was of the opinion that "till there are no corporate governance change in the whole PSU space, a sustained rise in these (PSB) stocks seems unlikely."

He said that if few large IBC (Insolvency and Bankruptcy Code) resolutions happen, then probably PSU banks may witness an upward correction.

"PNB may also be restricted to conduct normal business. Two of its Directors have also been divested of their functional powers. PNB will likely face significant operational challenges in the near term," Jefferies said in its report.

The CBI on Monday filed a chargesheet against MD and and 21 others, including 11 bank officials, in the over Rs 13,000 crore fraud case in which diamantaire and his uncle were allegedly involved. Ananthasubramanian was earlier with PNB.

The agency also named Directors and Sanjiv Sharan, and (who dealt in international operations) and in its chargesheet filed in a special here.

CBI officials said the chargesheet names and his brother in connection with the issuance of Letters of Undertaking totalling Rs 6,498.20 crore during 2011-17.

--IANS

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, May 16 2018. 16:10 IST
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