Bad assets hit PNB hard; net dives 93%

Bad assets hit PNB hard; net dives 93%

 A higher provisioning for bad assets and contingencies dragged down state-owned Punjab National Bank’s (PNB) net profit by 93 per cent to Rs 51 crore for the three months ending December.

The bank had reported a net profit of Rs 774.56 crore in the corresponding quarter last fiscal. “I like to mention that the industry is going through very tough times and PNB has been one of the major lenders. And obviously the impact is felt on the bank which is very much visible on its books,” CEO Usha Ananthasubramanian said.

PNB increased its provisioning and contingencies allocation to Rs 3,775.53 crore for the October-December quarter of 2015-16, a steep increase from Rs 1,467.77 crore parked aside in the same quarter a year ago.

The bank’s asset quality deteriorated further as gross non-performing assets (NPAs) or bad loans hit 8.47 per cent of the gross advances during the third quarter of current fiscal, as against 5.97 per cent a year ago. Likewise, net NPAs rose to 5.86 per cent of the net advances as of December quarter of 2015-16, from 3.82 per cent in the previous year’s third quarter.

In absolute terms, the gross NPAs increased to Rs 34,338.22 crore as of December 2015, from Rs 22,211.43 crore. Net NPAs were at Rs 22,983.40 crore during the quarter, up from Rs 13,787.76 crore.

“The increase in NPA is on account of Bank’s exercises as part of RBI’s Asset Quality Review over the last two quarters of the current financial year. The bank is undertaking the same over the time-frame stipulated by the RBI,” PNB said.

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