Record losses the first sign of greater pain ahead for PNB in FY19

Bank has to carry forward Rs 100 billion provisioning in FY19 while weak capital base will impact growth of advances

Punjab National Bank (PNB) posted record losses at Rs 134 billion in the March 2018 quarter (Q4) which was way higher than the Rs 26-27 billion analysts had estimated. Moreover, for the first time, PNB posted Rs 4.5 billion of operating losses. With higher slippages of Rs 310 billion (extrapolated from the difference between the 9- months December 2017 and FY18 slippages) resulting in interest reversal, the bank’s net interest income (difference between interest earned and expensed) declined sharply by 16.8 per cent year-on-year in Q4. This, along with a sharp rise in cost-to-income ratio (61.5 per cent from 43