Shares of Punjab National Bank (PNB) fell nearly 10% on Thursday after the company announced a drop in revenue for the second quarter ending September 30.
The results were announced Wednesday after market hours. The state-owned bank announced a 78 percent increase in net profit to rupee 1,105 crore for the second quarter ending September 30 despite lower revenues.
He posted a net profit of Rs 620.81 crore in the corresponding quarter a year ago. However, the bank’s total income in the July-September quarter fell to Rs 21,262.32 crore from Rs 23,279.79 crore in the corresponding period last year, PNB said in a regulatory file.
The bank’s operating profit also fell to Rs 4,021.12 crore, from Rs 5,674.91 crore in the same quarter last year.
On the asset quality front, the lender’s gross non-performing assets edged up to 13.63% of gross advances at the end of September 2021, from 13.43% a year ago. Net NPA also rose to 5.49% from 4.75% a year ago.
Commenting on the quality of assets, SS Mallikarjuna Rao, Managing Director and CEO of PNB, said, “Quarter over quarter, there was a reduction in gross NPA to 13.63 and net NPA to 5.49. This was made possible by recoveries and upgrading during the current quarter across the segment. Efficiency of collection from July is better thanks to better control of collections.
“Over the next two quarters to come, we are very confident in controlling the slippages and also expect a recovery in various accounts. I don’t see much concern about the quality of the assets, ”he added.
Regarding the reduction in operating profits, Rao said, “We have taken one-off expenses related to family pension. We have increased provisions and some expenses that occur in the first quarter have occurred in the second quarter. If you even look at the provisions there has been a reduction in the provision and as a result we could show a net profit of Rs 1,103 crore which is an increase of almost 78% year over year. ‘other.
Regarding loan growth, Rao said, “Regarding credit growth, we saw an overall growth of around 2.7%. Retailing grew 6.7 percent, housing grew 6 percent and the corporate portfolio showed good improvement despite strong pressure on interest rates. We are able to create good pipelines for disbursements and therefore we are confident to show growth of around 6-8% by March 2022 in terms of overall credit. “
For a full management commentary, watch the video.
-With PTI inputs