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Fall in bad loans, lower provisioning help PNB cut losses; reports Rs 2,617 cr NPA divergence

The bank has reported a divergence in non-performing assets (NPAs) at Rs 2,617 crore for the year ended March 31, 2019.

By: ENS Economic Bureau | Mumbai | Published: June 21, 2020 12:10:06 am
pnb, Punjab National Bank, Punjab National Bank q4 report PNB has done the cash recovery of Rs 10,000 crore during the fiscal, while containing the fresh slippages to Rs 20,000 crore.. (Express photo by Ganesh Shirsekar, File)

Aided by a decline in bad loans and lower provisioning, public sector bank Punjab National Bank (PNB) has posted a lower standalone loss of Rs 697 crore for the fourth quarter ended March 31, 2020 as against a loss of Rs 4,750 crore in January-March period of 2018-19.

The bank has reported a divergence in non-performing assets (NPAs) at Rs 2,617 crore for the year ended March 31, 2019. While the bank announced NPAs of Rs 78,472 crore for the year, the RBI’s assessment put the figure at Rs 81,089 crore. Accordingly, the adjusted loss for the year works out to Rs 11,335 crore for March 2019 as against a loss of Rs 9,975 crore estimated by the bank earlier.

The bank also reported a divergence in provisions at Rs 2,091 crore for March 2019.

The bank’s gross NPAs declined to 14.21 per cent of gross advances at the end of March 2020, as against 15.50 per cent in March 2019. In absolute value, gross NPAs stood at Rs 73,478.76 crore at the end of 2019-20, lower than Rs 78,472.70 crore reported in the previous fiscal. Similarly, net NPAs were valued at Rs 27,218.89 crore as against Rs 30,037.66 crore.

The bank’s total income during the March quarter rose to Rs 16,388.32 crore from Rs 14,725.13 crore in the year-ago period. The provisioning for bad loans during the March quarter almost halved to Rs 4,618.27 crore.

The bank has done the cash recovery of Rs 10,000 crore during the fiscal, while containing the fresh slippages to Rs 20,000 crore. The bank is expecting the recovery of Rs 6,000-8,000 crore during the current fiscal and recovery will gather momentum from the third quarter onwards. Net NPAs also came down to 5.78 per cent as against 6.56 per cent in the year-ago period.

On the Covid pandemic, the bank said, “the situation continues to be uncertain and the bank is evaluating the situation on ongoing basis. The major identified challenges for the bank would arise from eroding cash flows and extended working capital cycles. The bank is gearing itself on all the fronts to meet these challenges.”

“The management believes that no adjustments are required in the financial results as it does not significantly impact the current financial year. Despite these events and conditions, there would not be any significant impact on the bank’s results in future and going concern assumptions as at presently made,” it said.

Gross NPAs fall to 14.21% of gross advances

– Punjab National Bank has reported a divergence in non-performing assets (NPAs) at Rs 2,617 crore for the year ended March 2019. While the bank announced NPAs of Rs 78,472 crore for the year, the RBI’s assessment put the figure at Rs 81,089 crore

– The bank’s gross NPAs declined to 14.21 per cent of gross advances at the end of March 2020, as against 15.50 per cent in March 2019

– The bank has done the cash recovery of Rs 10,000 crore during the fiscal, while containing the fresh slippages to Rs 20,000 crore. The bank is expecting the recovery of Rs 6,000-8,000 crore during the current fiscal year

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