Punjab National Bank reported an 18 per cent quarter-on-quarter drop in its standalone net profit to Rs 506 crore in the December quarter (Q3). The state-owned bank’s net interest income dropped marginally by 1 per cent to Rs 8,313 crore in Q3, compared with the previous quarter. In the third quarter of last financial year, PNB had reported a net loss of Rs 492 crore.
On a year-on-year basis, the bank’s net interest income – the difference between interest earned through lending and interest paid to depositors – grew 28 per cent. It grew 22 per cent to Rs 23,539 crore during the April-December period.
The year-on-year numbers are not comparable as Oriental Bank of Commerce, United Bank of India merged into Punjab National Bank from April 1, 2020.
The bank’s gross non-performing assets ratio dropped by 44 basis points to 12.99 per cent from 13.43 per cent as of September. The bank’s net NPA ratio was at 4.03 per cent in Q3, a 4.75 per cent sequential decline.
The lender has not classified any account that was not an NPA as on August 31, 2020, as a bad loan based on the Supreme Court’s blanket ban on fresh recognition of soured loans. However, the public sector bank has made a contingent provision of Rs 2,520 crore for such accounts that were not classified as NPA.
If the bank would have classified such accounts as NPA, the lender’s gross NPA and net NPA ratio would have been 14.71 per cent and 5.65 per cent, respectively, it said.
PNB’s provisions in Q3 increased 15.7 per cent sequentially to Rs 5,433 crore, of which Rs 3,118 crore was on account of bad loans. The bank’s provision coverage ratio as of December-end was 85.16 per cent, against 83 per cent in September 2020.