PNB clocks Q2 profit of Rs 507 crore as provision eases

NEW DELHI: State-owned Punjab National Bank (PNB) on Tuesday reported a profit of Rs 507.06 crore for the second quarter ended September 30 aided by substantial reduction in provisioning for bad loans.

The lender had posted a

loss of Rs 4,532.35 crore in the corresponding July-september quarter last year. During the quarter, provisions for bad loans sharply declined to Rs 3,253.32 crore against Rs 7,733.27 crore in July-september 2018. The provisions during the year-ago period included the amount for the Rs 14,000-crore fraud committed by jeweller duo Nirav Modi and Mehul Choksi.

Gross non-performing assets (NPAS) amounted to 16.76 per cent of the gross advances at the end of September, lower than 17.16 per cent a year ago. Net NPAS or bad

loans also came down to 7.65 per cent as against 8.90 per cent in the year-ago period.

Going forward, the focus on recovery will help bring down the net NPA to the comfort level of the Reserve Bank of India (RBI) by the end of the current fiscal, newly-appointed PNB managing director S S Mallikarjuna Rao said after announcing the quarterly numbers here. "If you look at the guidance, we are very confident that we can bring down the net NPA by March 2020 below 6 per cent," he said.

Rao, who was appointed the head of the country's second largest lender last month, has set an ambitious recovery target of Rs 24,000 crore for the entire fiscal. Of this, the bank has already done recovery of Rs 7,000 crore during the first half of the current fiscal and the remaining Rs 17,000 crore would be done in the remaining half through cash recovery and reduction, he added.

"In NCLT there are 14 cases which are in final stages. From NCLT we are expecting Rs 11,000 crore reduction from Npas...the real amount received will be around Rs 6,500 crore, against which the write-back will be about Rs 3,800 crore," he said.