Arresting bad loan to a satisfactory level, country's second largest public sector lender Punjab National Bank (PNB) posted a minor increase of 2.2 per cent in net profit to Rs 561 crore for the second quarter of the current fiscal. The bank's net profit was Rs 549 crore in the July-September quarter of last fiscal 2016-17. The lender said that it also contained slippages and remained below the March level.
“If you have seen the trend in the industry on the gross non-performing assets (NPAs), almost every bank has shown increase in gross NPAs, but our bank contained it and we are below the March level. Our fresh slippages have considerably gone down by more than Rs 3,000 crore during this quarter,” PNB Managing Director & Chief Executive Officer (CEO) Sunil Mehta told reporters.
“The fresh slippages in September last year were over Rs 11,000 crore, but now they are a little over Rs 8,000 crore,” he said.
The bank's gross bad loans or NPAs as a proportion of gross advances came down to 13.31 per cent (Rs 57,630.11 crore) at the end of September, from 13.63 per cent (Rs 56,465.63 crore) a year ago.
“The net NPAs also came down to 8.44 per cent of the net advances by September-end this year, from against 9.10 per cent a year ago. In absolute terms, the net NPAs stood at Rs 34,570.15 crore, compared with Rs 35,722.32 crore. However, the bank's provisions for bad loans rose to Rs 2,693.78 crore for the quarter under review, as against Rs 1,954.13 crore in the year-ago period,” the lender said. The bank also said that the total income of the bank increased to Rs 14,205.31 crore during the July-September quarter of 2017-18 as against Rs 13,638.64 crore in the year-ago period.
“Operating profit of the bank grew by 20 per cent to Rs 3,279 crore during the quarter under review from Rs 2,732 crore in same period a year ago,” it said.
On non-core assets, Mehta, however, said, “We have a large number of non-core assets and we have approval in place to sell a partial stake in some of these non-core assets, may be without diluting our promoters' stake into them. One of them is PNB Housing Finance.”
The bank has 39 per cent stake in PNB Housing Finance and the promoter stake holding will not go down below 30 per cent, leaving the bank a headroom to sell stake up to 9 per cent, said the bank chief.
On bank's capitalization, he further said, “Our move will mainly depend upon the market conditions because we are not going to sell in the distress. We are adequately capitalised during the current financial year to take care of our business growth requirement as well as our capital adequacy requirement.”
“However if we get good valuation for our non-core assets we will divest them and increase our core capital,” he added.