PNB falls 13% from day's high level on disappointing Q2 results

The stock dipped 8% at Rs 68.20, falling 13% from intra-day high level of Rs 78.60 on the BSE, after the bank reported higher-than-expected net loss in September quarter at Rs 45.32 billion in Q2FY19.

Shares of Punjab National Bank (PNB) dropped 8% to Rs 68.20, falling 13% from intra-day high level, after the state-owned bank reported higher- than-expected net loss in September quarter (Q2FY19), due to higher provisioning for bad loans. The stock touched a high of Rs 78.60 on the BSE in early morning trade, before the announcement of results.

PNB reported a net loss of Rs 45.32 billion in Q2FY19, as India's second-largest state lender by assets set aside more money to account for a massive fraud. This is a third straight quarterly loss recorded by the bank. It had posted a profit of Rs 5.61 billion in the year-ago quarter.

Net interest income (interest earned minus interest expended) declined 1% to Rs 39.74 billion against Rs 40.15 billion in the corresponding quarter of previous fiscal.

The loss was much bigger than an estimated average loss of around Rs 11 billion. Analysts had expected net interest income of Rs 45.33 billion for the quarter.

During the quarter ended 31st March 2018, a fraud was detected at Brady house Mumbai branch involving certain accounts under Gems & Jewellery sector amounting to Rs 143.57 billion.

The bank said, it had made provisions amounting to Rs 90.42 billion upto 30.06.2018. Further, the bank has made provisions of Rs 32.95 billion during quarter ended September 30, 2018. The remaining provision will be made during the next quarter of the current financial year as per terms of RBI's dispensation.

At 02:46 pm, PNB was trading 7.8% lower at Rs 68.50 on the BSE, as compared to 1.9% rise in the S&P BSE Sensex. The trading volumes on the counter jumped nearly four-fold, with a combined 86.08 million shares changed hands on the BSE and NSE so far.