NEW DELHI: Punjab National Bank (PNB) on Monday reported a 44 per cent decline in standalone net profit at Rs 629 crore in the third quarter ended December due to higher provisions for bad loans.
The state-owned bank had earned a net profit of Rs 1,127 crore in the year-ago period.
However, total income during October-December 2022 increased to Rs 25,722 crore as against Rs 22,026 crore in the year-ago period, PNB said in a regulatory filing.
During the quarter, the net interest income (NII) grew by 17.6 per cent to Rs 9,179 crore while operating profit increased by 12.6 per cent to Rs 5,716 crore on YoY basis, PNB managing director Atul Kumar Goel said.
However, provisions for bad loans increased to Rs 3,908 crore during the quarter as against Rs 3,654 crore a year ago, he said, adding, this led to an increase in Provision Coverage Ratio (PCR) to 85.17 per cent in December 2022 from 81.85 per cent in December 2021.
Secondly, he said, provision for wage revision and earmarking of performance linked incentives of Rs 79 crore was also made during the quarter.
On the asset quality front, the bank recorded an improvement with gross NPAs (Non-Performing Assets) declining to 9.76 per cent as compared to 12.88 per cent at the end of the third quarter of previous fiscal.
At the same time, net NPAs eased to 3.30 per cent as against 4.90 per cent in the same period a year ago.
The capital adequacy ratio rose to 15.15 per cent in the December quarter as against 14.91 per cent.
Asked about further raising of capital, Goel said the bank has the board approval for raising Rs 12,000 crore from Tier I and Tier II bonds.
Of this, he said, the bank plan to raise Rs 1,000 to 1,500 crore during the quarter depending on market condition and interest rate from AT1 bonds.
The bank has already raised Rs 4,000 crore from Tier II bonds and there is no need to raise from these bonds any more, he added.
Asked if the bank’s total profit can cross Rs 2,000 crore in FY23, Goel said, the bank would try to reach that level. So far, the bank has earned a net profit of Rs 1,349 crore in the 9 months of the current financial year.
The bank had earned Rs 3,457 crore in FY22.
Goel said the bank expects credit growth of 12-13 per cent while 8-9 per cent deposit growth.
As far as recovery is concerned, he said, the bank hopes to garner Rs 1,800 crore during the fourth quarter from the resolution of various NPA accounts.
With regard to sale of PNB stake in Canara HSBC OBC Life Insurance, Goel said, there has been a change in guidelines from IRDAI and now banks are allowed to hold stake as investment rather than as promoters.
In the light of this, he said, the bank will take a fresh view with regard to stake sale and it will maintain its promoter holding in PNB Metlife.
The bank would also participate in rights issue of PNB Housing Finance, he said, adding, the RBI has allowed to invest Rs 500 crore in the mortgage entity.
With the investment, the bank’s stake in the housing finance company would come down below 30 per cent but above 26 per cent.
Currently, PNB holds around 32 per cent stake in the PNB Housing Finance Ltd.
The state-owned bank had earned a net profit of Rs 1,127 crore in the year-ago period.
However, total income during October-December 2022 increased to Rs 25,722 crore as against Rs 22,026 crore in the year-ago period, PNB said in a regulatory filing.
During the quarter, the net interest income (NII) grew by 17.6 per cent to Rs 9,179 crore while operating profit increased by 12.6 per cent to Rs 5,716 crore on YoY basis, PNB managing director Atul Kumar Goel said.
However, provisions for bad loans increased to Rs 3,908 crore during the quarter as against Rs 3,654 crore a year ago, he said, adding, this led to an increase in Provision Coverage Ratio (PCR) to 85.17 per cent in December 2022 from 81.85 per cent in December 2021.
Secondly, he said, provision for wage revision and earmarking of performance linked incentives of Rs 79 crore was also made during the quarter.
On the asset quality front, the bank recorded an improvement with gross NPAs (Non-Performing Assets) declining to 9.76 per cent as compared to 12.88 per cent at the end of the third quarter of previous fiscal.
At the same time, net NPAs eased to 3.30 per cent as against 4.90 per cent in the same period a year ago.
The capital adequacy ratio rose to 15.15 per cent in the December quarter as against 14.91 per cent.
Asked about further raising of capital, Goel said the bank has the board approval for raising Rs 12,000 crore from Tier I and Tier II bonds.
Of this, he said, the bank plan to raise Rs 1,000 to 1,500 crore during the quarter depending on market condition and interest rate from AT1 bonds.
The bank has already raised Rs 4,000 crore from Tier II bonds and there is no need to raise from these bonds any more, he added.
Asked if the bank’s total profit can cross Rs 2,000 crore in FY23, Goel said, the bank would try to reach that level. So far, the bank has earned a net profit of Rs 1,349 crore in the 9 months of the current financial year.
The bank had earned Rs 3,457 crore in FY22.
Goel said the bank expects credit growth of 12-13 per cent while 8-9 per cent deposit growth.
As far as recovery is concerned, he said, the bank hopes to garner Rs 1,800 crore during the fourth quarter from the resolution of various NPA accounts.
With regard to sale of PNB stake in Canara HSBC OBC Life Insurance, Goel said, there has been a change in guidelines from IRDAI and now banks are allowed to hold stake as investment rather than as promoters.
In the light of this, he said, the bank will take a fresh view with regard to stake sale and it will maintain its promoter holding in PNB Metlife.
The bank would also participate in rights issue of PNB Housing Finance, he said, adding, the RBI has allowed to invest Rs 500 crore in the mortgage entity.
With the investment, the bank’s stake in the housing finance company would come down below 30 per cent but above 26 per cent.
Currently, PNB holds around 32 per cent stake in the PNB Housing Finance Ltd.
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