Shares of National Bank of Punjab plunged on Thursday after the public lender’s quarterly performance fell well below Street estimates.
GNP shares fell 10% to a 52-week low of 29.5 rupees each on BSE in the opening minutes of the trade itself.
Punjab National Bank’s net profit fell 65.5% on an annual basis to Rs 201.6 crore, according to a regulatory filing. Its net interest income – or the difference between interest earned and interest paid – rose 5% year on year to Rs 7,304.1 crore for the three month period, but did not meet the expectations,
GNP slippages soared 110.8% sequentially to Rs 10,506 crore, and write-offs tripled in the October-December period.
However, its asset quality improved, with its gross non-performing assets (NPA) as a percentage of total loans down 110 basis points to 11.78% from the previous quarter.
PNB continued to increase its provisions for bad debts and contingencies. Its provisions increased by 44.7% sequentially to Rs 4,851.5 crore.
The board of PNB has announced a final dividend of 64 paise per share for the financial year ending March 2022.
Morgan Stanley maintained an “equal weight” rating on PNB with a target price of Rs 41 each. Despite a big hit on the cost front, PNB’s profit is 81% lower than the brokerage’s estimate.
The brokerage’s target implies a 23.9% rise in the stock from Wednesday’s closing price.
First post: STI