NEW DELHI: New Delhi: India’s second-largest public sector lender Punjab National Bank (PNB) is back in the black, posting net profit of ₹1,018.63 crore on the back of a decline in provisioning for bad loans.
The lender had incurred losses of ₹4,750 crore in the March quarter and ₹940 crore in the June quarter of 2018-19.
Provisions and contingencies declined by almost two-thirds year-on-year to ₹2,023 crore in April-June. Gross non-performing assets (GNPA) declined from 18.26% in the year-ago period to 16.49% in quarter-ended June. Net NPA was down from 10.58% a year ago to 7.17% in April-June. However, its asset quality deteriorated on a sequential basis. GNPA and NNPA were at 15.50% and 6.56%, respectively, in the January-March quarter.
PNB managing director and chief executive Sunil Mehta said gross and net NPAs have fallen in absolute terms. However, in terms of percentage, net and gross NPA numbers can be different from absolute numbers, as the first quarter is usually lean for the entire banking system, and the fall in numbers could be due to base effect.
Mehta added that the bank’s core recovery has been good despite cases stuck at bankruptcy tribunals.
Provisioning coverage ratio (PCR) increased from 61.80% in the June quarter of 2018 to 74.63% in the three months ended 30 June. PCR is the amount set aside to cover NPAs.
PNB had incurred net losses in 2017-18 and 2018-19 after it unearthed a fraud of over ₹14,000 crore involving jewellers Nirav Modi and Mehul Choksi at its Brady Road branch in Mumbai in January 2018.
Thereafter, PNB posted losses for three consecutive quarters, beginning January-March 2017-18.
The bank said it has taken several initiatives to recover bad loans, including setting up a stressed asset management vertical with a dedicated team of 2,700.
