PNB swings to black, logs Q1 profit of Rs 1,019 crore

New Delhi: State-owned Punjab National Bank (PNB) staged a comeback by registering a net profit of Rs 1,019 crore for the first quarter of the current fiscal due to fall in bad loan provisions as asset quality improved.

The bank had posted a net loss of Rs 940 crore in the corresponding April-June period of the previous fiscal 2018-19.

Sequentially, the bank had suffered a huge loss of Rs 4,750 crore in the fourth quarter of the preceding fiscal ended March 2019. As a result, the Delhi-headquartered lender had posted a net loss of Rs 9,975.49 crore in 2018-19.

"The bank has booked a net profit of Rs 1,019 crore during this quarter. During the last quarterly results, we had said that the worst was behind us and we will do better in the coming quarters.

"We have introduced major changes, the bank has done a lot in improving our system and processes so as to bring in stability into our business results and to bring in stability in our asset quality," its Managing Director and Chief Executive Officer Sunil Mehta said at a press conference here on Friday.

Total income of the bank rose to Rs 15,161.74 crore during the June quarter of 2019-20, as against Rs 15,072.41 crore in the year-ago period.

Efforts such as the centralised loan processing system, robust stressed asset management and improved monitoring systems have started reaping results, Mehta said.

The state-sector lender improved on its asset quality as the gross non-performing assets (NPAs) fell to 16.49 per cent of the gross advances at the end of June 2019, as against 18.26 per cent at June 2018. Net NPAs too fell to 7.17 per cent from 10.58 per cent.

NPAs fell in absolute terms as well. Gross NPAs stood at Rs 77,267.29 crore at the end of the June quarter, from Rs 82,888.79 crore a year earlier. Net NPAs declined to Rs 30,179.66 crore, from Rs 43,872.47 crore.

Mehta said the bank has brought down its bad assets both on yearly and quarterly basis, which shows that it is on the right track and exuded confidence of improving further.

"We would like to come down to 10-12 per cent (gross NPAs) by the end of this fiscal. NPA is getting down year-on-year and quarter-on-quarter. Our credit portfolio is growing, which is an indication that in times to come the ratio (NPA) will improve further," he said.

Bank's provisioning for bad loans also came down to Rs 2,147.13 crore for April-June quarter of current fiscal, as against Rs 4,981.99 crore in year ago's same quarter.

Also, there was reduction in fresh addition to NPAs at Rs 5,412 crore during the quarter under review, as against Rs 7,363 crore earlier. Of this, fresh slippages were Rs 4,711 crore, as against Rs 5,250 crore.

Mehta said the recoveries during the quarter were purely due to its general recovery process, as nothing came out from the NCLT admitted cases nor much sales happened to asset reconstruction companies (ARCs).

The provision coverage ratio improved to 74.63 per cent during the quarter, as against 61.80 per cent in the June quarter of 2018-19.

Enlisting the initiatives taken for recovery of NPAs, the bank said it organised more than 12,000 recovery camps during the quarter that generated Rs 2,063 crore.

Domestic deposits of the bank grew to Rs 6.49 lakh crore as on June 30, 2019 from Rs 4.86 lakh crore a year ago. Domestic CASA (current account/savings account) stood at Rs 2.78 lakh crore, up 42.84 per cent.

Also, the bank registered a robust growth of over 22 per cent in its retail credit at Rs 9.12 lakh crore and housing loans were up by 30 per cent at Rs 54,451 crore. Stock of PNB closed 2.95 per cent higher at Rs 68 on BSE.