Bad loan provisions down: PNB posts Rs 262 crore net on higher incomehttps://indianexpress.com/article/business/banking-and-finance/bad-loan-provisions-down-pnb-posts-rs-262-crore-net-on-higher-income-4659347/

Bad loan provisions down: PNB posts Rs 262 crore net on higher income

The bank had reported a whopping standalone loss of Rs 5,361.70 crore in the January-March period of the preceding fiscal, 2015-16, due to a higher provisioning for bad loans.

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PNB’s MD and CEO Sunil Mehta said the bank has witnessed improvement in gross net performing assets (NPAs) or bad loans which declined to 12.53 per cent of gross advances at the end of March this year, as against 12.90 per cent year ago.

Punjab National Bank on Tuesday posted Rs 262 crore profit for the March quarter of last fiscal as its net interest income rose and provisions for bad loans fell. The bank had reported a whopping standalone loss of Rs 5,361.70 crore in the January-March period of the preceding fiscal, 2015-16, due to a higher provisioning for bad loans.

PNB’s total income for the fourth quarter of 2016-17 rose to Rs 14,990 crore from Rs 12,669 crore in the year-ago period due to a healthy growth of 33 per cent in net interest income. Net interest income grew to Rs 3,684 crore in January-March 2017, as against Rs 2,768 crore in January-March 2016. The bank’s net interest margin from domestic operations came down to 2.69 per cent in 2016-17 from 2.95 per cent in 2015-16.

PNB’s MD and CEO Sunil Mehta said the bank has witnessed improvement in gross net performing assets (NPAs) or bad loans which declined to 12.53 per cent of gross advances at the end of March this year, as against 12.90 per cent year ago.

“Non performing assets of the bank has fortunately shown a very good performance this year,” Mehta said. Net NPAs were trimmed to 7.81 per cent against 8.61 per cent year ago.

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This helped the lender to cut down on its provisioning for bad loans to Rs 4,910.39 crore for the quarter under review, from Rs 10,773.37 crore in the same period year ago. Mehta said provisioning of the bank has gone down and there was restructuring of few loan accounts. PNB stock ended 4.55 per cent higher at Rs 174.55 on the BSE.

On the bank’s strategy to deal with bad assets, he said a “war room” has been created and efforts are being intensified to resolve large accounts by strengthening the Joint Lenders’ Forum. Mehta said e-auction drive and sale to asset reconstruction companies helped it recover Rs 22,863 crore during the year.