PNB Q2 net profit down 52%; shares come under selling pressure

MUMBAI: Shares of Punjab National Bank came under selling pressure on disappointing second-quarter results.

The bank’s net profit slipped to Rs 505.5 crore, down, 52.5 per cent, from Rs 1065.6 crore in the corresponding quarter last fiscal.

Net interest income increased to Rs 4,015.6 crore, up 10 per cent, against Rs 3,649.4 crore in the corresponding quarter last fiscal year.

The bank’s asset quality concerns remained as gross NPAs during the September quarter increased at 5.14 per cent as against 4.84 per cent a quarter ago.

Net NPAs increased to 3.07 per cent as against 2.98 per cent in the previous quarter.

Punjab National Bank’s provisions rose to Rs 1,899 crore as against Rs 1,066 crore in the last quarter. The provision coverage ratio stood at 55.27 per cent as on September 30. The bank took a treasury hit of Rs 348.5 crore in the September quarter. The bank has transferred Rs 10,297 crore to HTM category from AFS.

Nilesh Parikh, Associate Director - Wholesale Capital Markets, Edelweiss Financial Services, says that while the results disappointed, the bank’s valuations provide some comfort.

“NPAs have moved up, and that suggests that slippages remain elevated,” he said in an interview to ET Now.

Edelweiss has a ‘hold’ rating on the stock and it says it'll continue to retain the rating as PNB’s valuations provide comfort.

At 12:44 p.m.; the stock was at Rs 517.90, down 4.99 per cent, on the BSE. It touched a high of Rs 549.85 and a low of Rs 515.55 in today's trade.