Top 5 takeaways from PNB Q3 results; stock falls over 6%

NEW DELHI: Punjab National Bank (PNB) plunged over 6 per cent in afternoon trade on Tuesday after its net profit nosedived to Rs 51 crore in the quarter ended December 31.

The stock corrected as much as 6.4 per cent in a trade to touch a low of Rs 88.25, at 01:30 pm; PNB was trading 5 per cent lower at Rs 89.70.

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We have collated a list of top five takeaways from PNB Q3 results:

PAT nosedived by over 90%:

PNB reported a net profit of Rs 51 crore for the quarter ended December 31, down 93 per cent year-on-year (YoY), compared to Rs 774.56 crore reported in the corresponding quarter of last fiscal, led by higher provision expense.

Differed Tax:

During the quarter, the bank has recognised deferred tax assets amounting to Rs 1,132.04 crore which was so far recognised as at the year-end, in accordance with the applicable accounting standards, PNB said in a note filed with exchanges. Accordingly, figures of previous corresponding reporting periods are not comparable.

Increase in provisions:

Provisions expenses increased by 157.2 per cent YoY and 100.6 per cent quarter-on-quarter (QoQ) to Rs 37,76 crore led by the very high level of gross NPA formation. The lender doubles provisions from Rs 1,882 crore in Q2. If there is an increase in provisions, the bank is expecting more non-performing assets (NPAs) to get added in coming quarters.

Increase in Gross NPA:

Punjab National Bank saw an increase in gross non-performing assets (bad loans) which surged to 8.47 per cent of advances in Q3 against 6.36 per cent in Q2. Gross NPA grew by 37.7 per cent YoY to Rs 34,300 crore led by the highest ever fresh slippages. "Major increase in fresh slippages was due to a review of stressed accounts by RBI," Reliance Securities said in a note.

Increase in non-performing assets:

Punjab National Bank saw an increase in net non-performing assets (bad loans) which surged to 5.86 per cent of advances in Q3 against 3.99 per cent in Q2. Net NPA grew to Rs 22,983 crore for the quarter ended December 31, compared to Rs 15,187 crore reported in the previous quarter.