PNB Q3 profit jumps 4-fold to Rs 207 cr

State-owned Punjab National Bank today posted four-fold jump in net profit at Rs 207 crore for the December quarter of current fiscal on account of increase in treasury income and decline in cost of deposits.
The bank had reported net profit of Rs 51 crore in the corresponding quarter of last fiscal.
"Profit during the quarter was driven by decline in cost of deposit, recovery of bad loans and rise in treasury income," PNB Managing Director Usha Ananthasubramanian said while announcing third quarter numbers here.
The bank's asset quality, however, deteriorated further as gross non-performing assets (GNPAs) or bad loans hit 13.70 per cent of the gross advances during third quarter of current fiscal, 2016-17, as against 8.47 per cent a year ago.

Likewise, net NPAs rose to 9.09 per cent of net advances as of December quarter of 2016-17, from 5.86 per cent in the year-ago period.
Explaining the reason, Ananthasubramanian said the NPA ratio has increased because advances have not increased accordingly and basically the denominator effect.

The total provisions rose marginally to Rs 2,947 crore for the October-December quarter of 2016-17 as against Rs 2,867 crore parked aside in the same quarter a year ago.
However, provision for NPAs bad loans declined to Rs 3,363 crore during the quarter from Rs 3,767 in the same quarter a year ago.
In absolute terms, the gross NPAs declined marginally to Rs 55,628 crore as of December 2016, from Rs 55,818 crore.

At the same time, total income of the bank rose by 4.4 per cent to Rs 14,498 crore during the third quarter of current fiscal as against Rs 13,891 crore in the same period of 2015-16.
Other income including fee income of the bank during the quarter witnessed a hefty 50 per cent increase to Rs 2,513 crore as against Rs 1,671 crore.
The net interest income (NII), however declined by 9.4 per cent to Rs 3,731 crore.
During the quarter under review, the cost of deposit declined to 5.31 per cent as compared to 5.81 per cent in the same quarter in the previous fiscal due to impact of demonetisation leading to surge in low cost deposits.

With regard to NPA recovery, Ananthasubramanian said, it witnessed a jump of 80 per cent to Rs 937 crore during the quarter. The bank has completed asset quality review (AQR) exercise.
Going forward, she said the bank's focus of will be on increasing advances and recovery of bad loans.
When asked about selling its stake in subsidiaries, she said it is difficult to draw a timeline.
The bank has headroom, it will create value at an opportune time, she added.
Asked if PNB will pick up stake in India Post Payment Bank wherein the bank is providing technology platform, she said there is no proposal under consideration at the moment.

During the quarter, the Net Interest Margin declined to 2.33 per cent from 2.75 per cent and hopes to close the year with 2.3 per cent.
On further cut in interest rate, she said, the ALCO will take a call based on the asset-liability position and if headroom is available the bank will cut rate.
It had reduced benchmark lending rate last month by 0.7 per cent.
PNB stock closed 1.44 per cent higher at Rs 151.80 on BSE.