PNB suffers record loss of Rs 5,367 crore in Q4 on high NPAs

PNB suffers record loss of Rs 5,367 crore in Q4 on high NPAs

Reeling under huge bad loans, Punjab National Bank (PNB) today posted the record high quarterly loss by any public sector lender at Rs 5,367 crore for the fourth quarter ended March 31.

A three-fold surge in provisioning for bad loans, including for power discoms and Punjab foodgrain related loans, were the main drags on the bank's performance and it expects the pain to continue for some more time.

The second-largest public sector bank had a net profit of Rs 306.56 crore in the corresponding period of 2014-15.

"We have done Asset Quality Review (AQR) fully... the bank has provided Rs 11,380 crore for bad loans during the quarter including Rs 385 crore for discoms," PNB Managing Director Usha Ananthasubramanian told reporters here.

Besides, the bank has made provision of Rs 167 crore for losses on Punjab foodgrain related loans, she added.

Provision for NPAs rose more than three-fold to Rs 11,380 crore in the fourth quarter as compared to Rs 3,281 crore in the same period a year ago.

The Gross Non-Performing Assets (NPAs) rose significantly to 12.9 per at the end of March 2016, from 6.55 per cent a year ago. The net NPAs too rose to 8.61 per cent against 4.06 per cent at March 2015.

In absolute terms, the gross NPAs of the bank nearly doubled to Rs 55,818 crore from the year-ago levels.

Asked if the stress on the balance sheet would continue, Ananthasubramanian said the pain would continue for some more time given the economic situation.

However, the bank saw its operating profit rise to Rs 3,228 crore, from Rs 3,203 crore in the year-ago quarter.

Total income during the quarter declined to Rs 13,276 crore, from Rs 13,456 crore a year ago.

Interest income also fell to Rs 10,824 crore, from Rs 11,651 crore in the fourth quarter of 2014-15. The net interest income fell to Rs 2,768 crore from Rs 3,792 crore.

On full year basis, the bank reported a loss of Rs 3,974 crore for 2015-16, as against a profit of Rs 3,062 crore in the previous fiscal.

However, full-year total income rose to Rs 54,301 crore, from Rs 52,206.09 crore in 2014-15. 

Net interest margin of the bank declined to 2.95 per cent in 2015-16, from 3.55 per cent.

Provisions for bad loans during the entire fiscal more than doubled to Rs 18,469 crore, compared to Rs 7979 crore in the previous fiscal.

Fresh slippages during the year rose to Rs 41,060 crore as against Rs 15,692 crore in the previous fiscal.

As part of fight against Non Performing Assets, Ananthasubraman said, the bank sold Rs 1,832 crore bad loans to asset reconstruction companies (ARCs).

The bank will be selling assets to ARCs during the current fiscal also but will be difficult to give the number, she added.

Besides, intensification of e-auction drive or exploring possibilities in each stressed account is yielding result, she said.

On capital raising, she said, the bank would be seeking funds from the government this year as well.

Bank is ready to shore up capital at an opportune time and option is available through Additional Tier 1 and Tier 2 bonds. Besides, the bank is also considering to sell some of its non-core business, she added.

It will sell its holding from some its non-core business in the coming months, she said.

PNB's total business stood at Rs 9.65 lakh crore during the year, up 9.5 per cent since the previous fiscal.

Capital adequacy of the bank was 11.2 per cent at the end of March, as per the Basel-III norms.

Despite bad quarterly number, shares of PNB closed 3.25 per cent higher at Rs 76.20 each at the BSE.  

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