Punjab National Bank up 7% after strong Q2 nos; to sell partial stake in PNB Housing

Moneycontrol news

Public sector lender Punjab National Bank shares price rallied 7.4 percent intraday Friday after strong September quarter earnings and the board approval for stake sale in PNB Housing Finance.

Profit for the quarter increased to Rs 560.6 crore, a growth of 2 percent over Rs 549 crore in same quarter last fiscal. Net interest income during the quarter rose by 3.5 percent year-on-year to Rs 4,015.2 crore.

Asset quality improved on sequential basis. Gross non-performing assets (NPA) as a percentage of gross advances were lower at 13.31 percent against 13.66 percent in previous quarter and net NPA also declined to 8.4 percent, from 8.67 percent.

Sunil Mehta, MD & CEO, PNB told CNBC-TV18 that fresh slippages for the quarter stood at Rs 3,500 crore (which was far better than analyst estimates), against Rs 6,649 crore in previous quarter.

Numbers were ahead of estimates. Profit was estimated at Rs 366 crore and net interest income at Rs 3,913.2 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

While addressing press conference, he said the bank was adequately capitalised for FY18, but it might sell some non-core assets without diluting promoter’s required stake. "We can bring down stake as a promoter in PNB Housing to 30 percent."

Domestic net interest margin for the quarter also improved to 2.62 percent, compared with 2.56 percent in previous quarter.

The board of directors on Thursday has authorised the management of the bank to partially sell its stake in PNB Housing Finance.

PNB Housing Finance will continue to be core associate of Punjab National Bank.

As of September 2017, PNB holds 38.86 stake in PNB Housing Finance.

At 13:39 hours IST, the stock price was quoting at Rs 209.65, up Rs 12.35, or 6.26 percent amid high volumes on the BSE.