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PNB's pre-tax profit surges by 54% to Rs 979 cr in Q2, PAT up 22%

Net interest income soars 29% to Rs 8,393 crore, NPA position improves

Punjab National Bank | Q2 results | Banking

Somesh Jha  |  New Delhi 

Punjab National Bank, PNB
A Punjab National Bank branch is seen in this photo

State-owned reported a jump in its pre-tax profit of Rs 979 crore in the second quarter (Q2FY21), compared to a profit of Rs 633 crore in the corresponding period last year.

The Delhi-based lender posted a net profit of Rs 621 crore in the second quarter – a 22 per cent jump from Rs 507 crore in the year-ago period.

The bank’s net interest income (difference between interest earned through lending and interest paid to depositors) soared 29 per cent to Rs 8,393 crore from the year-ago period. The bank made a provisioning of Rs 3,811 crore towards bad loans in Q2FY21 – 22 per cent lower than that in the same quarter of the previous financial year.

“The situation continues to be uncertain and the bank is evaluating the situation on ongoing basis. The major identified challenges for the bank would arise from eroding cash flows and extended working capital cycles. The bank is gearing itself on all the fronts to meet these challenges,” the PNB said in its balance sheet, made public on Monday after a board meeting.

The bank’s gross non-performing assets (NPAs) reduced sequentially to 13.43 per cent in Q2, compared to 14.11 per cent in the previous quarter.

The bank had made adequate provisions towards stressed assets as its provision coverage ratio moved up to 83 per cent from 80.75 per cent in the previous quarter.

The bank has made an additional provisioning to the tune of Rs 400 crore “as a matter of prudence for asset classification benefit” extended due to a moratorium on loan repayments. Further, PNB clarified that it has made a ‘contingent provision’ of Rs 180 crore in respect of accounts that were not classified as NPA due to an ongoing matter being heard in the Supreme Court, following which the apex court has ordered a standstill on classifying accounts as NPA till August 31.


It said that the bank has made provisioning towards its investment worth Rs 342 crore in its associate bank JSC Tengri Bank (formerly known as Bank of Kazakhstan) after the latter’s licence was revoked by the country’s financial regulator.

The bank’s capital adequacy ratio, considered to be one of the key indicators for its health, inched up to 12.84 per cent in this quarter, compared to 12.63 per cent in the previous one.

The RBI requires banks to maintain the capital adequacy ratio at 11.5 per cent. Banks are required to maintain a minimum capital to ensure they do not lend all the money they receive as deposits and keep a buffer to meet future risks.

The bank has extended resolution timeline towards eight loan accounts worth Rs 1,790 crore till the end of September. In April, the Reserve Bank of India (RBI) had announced a 90-day extension for the resolution period for large stressed assets which were not resolved within the 210 day deadline, according to the RBI guidelines.

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First Published: Mon, November 02 2020. 20:07 IST