With improved over all asset quality, country’s second largest public sector lender Punjab National Bank (PNB) on Tuesday posted Rs 262 crore profit for the fourth quarter of last fiscal as the bank marginally reduced its bad loans with healthy growth in net interest income. Besides, the bank saw the similar growth in other income, operating income and asset quality improvement which helped the company to turn profitable despite elevated provisions.
The newly-appointed Managing Director Sunil Mehta of bank said the bank witnessed improvement in gross net performing assets (NPAs) or bad loans which declined to 12.53 per cent of gross advances at the end of March this year, as against 12.90 per cent year ago.
“Net NPAs were trimmed to 7.81 per cent against 8.61 per cent year ago. This helped the lender to cut down on its provisioning for bad loans to Rs 4,910.39 crore for the quarter under review, from Rs 10,773.37 crore parked aside in the same period year ago,” Mehta said, adding that the provisioning of the bank has gone down and there was restructuring of few loan accounts.
The lender had reported a staggering standalone loss of Rs 5,361.70 crore in the January-March period of the preceding fiscal, 2015-16, due to a higher provisioning for bad loans. PNB’s total income for the fourth quarter of 2016-17 rose to Rs 14,989.33 crore from Rs 12,669.21 crore in the year-ago period due to a healthy growth of 33 per cent in net interest income. It was Rs 3,684 crore as against Rs 2,768 crore. On the banks strategy to deal with bad assets, he said a ‘war room’ has been created and efforts are being intensified to resolve large accounts by strengthening the Joint lenders’ Forum (JlF).
Mehta, however, said e-auction drive and sale to asset reconstruction companies (ARCs) helped it recover Rs 22,863 crore during the year. “NPAs are down because of restructuring of loans and sale to ARCs. We are actively taking part in JlF mechanism for speedy resolution of bad assets. Among large corporate advances, we are targeting only quality segment so that we can reduce our risk weighted assets,” he added.
For the full fiscal 2016-17, bank posted standalone net profit of Rs 1,324.80 crore against a net loss of Rs 3,974.39 crore in 2015-16. The total income for the fiscal was at Rs 56,227.36 crore, up from Rs 53,424.40 crore a year earlier. On consolidated basis, net profit in 2016-17 was Rs 1,187.24 crore as against a loss of Rs 3,689.77 crore in 2015 -16 while income was Rs 57,225.66 crore, from Rs 56,903.50 crore a year ago. Mehta said the bank is planning to sell off its non-core assets to improve its balance sheet.
On capital raising plans, he said, “I will be happy not to raise capital from the market but from internal accruals. We expect a growth of 10-12 per cent for the bank in the current fiscal as sees good demand from retail, MSME and agricultural sectors.” On good prediction for monsoon by IMD, he said the bank hopes good crops are expected and better rural income will be generated. “We also expect growth in rural housing sector due to schemes announced by the Government,” Mehta added.