PNB NET LOSS AT ~492 CR

Punjab National Bank (PNB) slipped into losses in the third quarter of 2019-20, posting its first quarterly loss in over a year ahead of its planned merger with two other public sector banks (PSBS).

PNB’S net loss stood at ~492.3 crore in October-December 2019, compared to a net profit of ~507 crore in the previous quarter.

A big jump of 73 per cent in provisioning for bad loans, from ~2,565 crore in the same quarter in the previous financial year to ~4,445 crore, affected the profitability of the second-largest PSB.

PNB was in the red last in the September quarter of 201819, when its net loss was ~453 crore. In the third quarter of this financial year, the bank’s net interest income (difference between interest earned through lending and interest paid to depositors) remained flat at around ~4,355 crore from a year-ago period.

The bank’s fresh slippages — the amount of loans that turned from good to bad — doubled to ~6,783 crore from ~3,324 crore in the same quarter last year. More than 50 per cent of the fresh slippages happened in agriculture (~2,100 crore) and the micro, small and medium enterprises (MSME) sectors (~1,400 crore). The bank had to provide for ~1,189 crore towards housing finance company Dewan Housing Finance Corporation.

The bank has an exposure of around ~1,000 crore towards Vodafone Idea, which will add to the stress. The bank is expecting fresh NPAS of ~3,000 crore in the next two quarters, mostly on account of stress in agriculture and MSME accounts.

“Cases worth ~8,800 crore will come up for resolution in bankruptcy courts in the fourth quarter and we expect a recovery of ~3,000 crore from these accounts,” PNB Managing Director and Chief Executive Officer S S Mallikarjuna Rao told CNBC-TV18 on Tuesday.