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PNB loses Rs 8,000 cr m-cap in 2 days; 6-times its annual profit

Press Trust of India  |  New Delhi 

Stung by a massive Rs 11,400 crore fraud, state-run (PNB) has lost over Rs 8,000 crore of market valuation in two days -- an amount equivalent to over six-times its full-year profit.

PNB today extended its fall for the second straight session and ended the day 12 per cent lower at Rs 128.35 on The stock had fallen 10 per cent yesterday, after the lender said it had detected a Rs 11,400 crore (USD 1.77 billion) fraud at a branch.

Following the slump in the counter over the last two days, the market capitalisation of the company has plunged a whopping Rs 8,076.59 crore to Rs 31,132.41 crore. This is more than 6-times of the company's full-year net profit of Rs 1,324 crore recorded in FY 2016-17.

The quantum of fraud itself is more than 8-times the bank's annual profit.

The said it had detected a USD 1.77 billion fraud in which billionaire allegedly acquired fraudulent letters of undertaking (LoUs) from one of its branches for overseas credit from other Indian lenders.

PNB has suspended 10 officers over the scam and referred the matter to CBI for investigation.

Meanwhile, shares of settled for the day at Rs 1199.00, down 4.30 per cent on the

While PNB did not name other lenders, Union of India, and are said to have offered credit based on LoUs issued by PNB.

An LoU is a letter of comfort issued by one bank to branches of other banks, based on which foreign branches offer credit to buyers.

Consequently, shares of settled down 0.95 per cent, ended the day down 2.31 per cent and was quoted down 0.17 per cent.

This could be the biggest banking fraud in as its quantum was bigger than an estimated Rs 9,000 crore scam at erstwhile Satyam Computers.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 15 2018. 17:10 IST