PNB profit drops 28% to Rs 806 cr

The lender registered a profit of Rs 1,131 cr in the corresponding period a year ago

State-run Punjab National Bank (PNB’s) net profit declined 28 per cent to Rs 806 crore for the quarter ended March, 2014, due to higher provisioning for rising bad loans.      

The lender registered a profit of Rs 1,131 crore in the corresponding  period a year ago.     

Chairman and Managing Director K R Kamath told reporters here: “We had fresh slippage of Rs 4,189 crore and increase in existing NPAs (non-performing assets) to Rs 263 crore, totalling Rs 4,452 crore.” “We have taken note of this pressure on the asset quality and drawn a strategy and launched a recovery campaign. We will reverse the trend and bring about improvement in the asset quality.”

Provisioning for bad loans jumped 45 per cent to Rs 2,139 crore during the quarter, against Rs 1,478 crore in the corresponding period a year ago.      

Gross non-performing assets (NPAs) stood at 5.25 per cent for the quarter under review, up from 4.27 per cent in the year-ago period.

Net NPAs stood at 2.85 per cent at the end of the quarter.      

Following the financial results, shares of the bank tanked 4.1 per cent to settle at Rs 800.05 on the BSE on Tuesday, against 1.36 per cent gains in broader stock market.      

Kamath said slippages came in from all sectors. However, it received good results from recovery campaign and the tempo will be maintained in 2014-15 also to reverse the trend and bring about change in asset quality, he added.         

Sector-wise, retail loan sector did well and the bank will continue to focus on agriculture, retail and SME segments, he said.      

Interest income rose to Rs 11,101 crore in the January- March quarter FY14, from Rs 10,378 crore in the corresponding period last year.     

Total income increased to Rs 12,498.23 crore during the fourth quarter, from Rs 11,552.84 crore in the same period of the previous financial year.      

For full 2013-14 financial year, PNB's net profit dropped 29.6 per cent to Rs 3,342.57 crore.