Earnings Outlook
PNB net profit seen up 140% YoY on lower provisions
This story was originally published at 22:27 IST on 25 July 2024
Register to read our real-time news.Informist, Thursday, Jul 25, 2024
NEW DELHI – Punjab National Bank is expected to report a 140.0% year-on-year jump in its net profit for Apr-Jun, thanks in large part to lower provisions, analysts said. Sequentially, however, the net profit is seen flat.
The bank's net profit for the quarter ended June is seen at 30.13 bln rupees, according to an average of estimates of five brokerage firms. Net profit estimates for the quarter range from 27.14 bln rupees to 32.10 bln rupees. The state-owned bank had reported a 159.8% on-year jump in its net profit to 30.10 bln rupees in Jan-Mar. The bank is scheduled to detail its earnings for Apr-Jun on Saturday.
"We expect the bank to report modest operating profit growth and this along with a decline in provisions will result in strong earnings growth," Kotak Institutional Equities said in a pre-earnings report.
The bank's provisions (other than tax) and contingencies had fallen 58.5% on year to 15.88 bln rupees in Jan-Mar. Provisions for non-performing assets were also down 46% on year at 19.58 bln rupees last quarter.
While most brokerages expect the asset quality to be stable, Emkay Global Financial Services said that the slippages could inch up, mainly from the agriculture segment due to seasonal stress. The lender's gross non-performing asset ratio was 5.73% as of Mar 31, while the net non-performing asset ratio was 0.73%.
Business growth of the bank remained healthy in Apr-Jun. Total advances rose 12.7% on year to 10.33 trln rupees as of Jun 30, according to its provisional figures released earlier this month. Total deposits increased 8.5% on year to 14.08 trln rupees as of Jun 30. Credit-deposit ratio of the bank rose 275 basis points on year and 160 bps on quarter to 73.39% as of Jun 30.
The net interest income--the difference between interest earned and expended--is expected to rise 11.1% on year in Apr-Jun to 105.54 bln rupees, according to an average of estimates of five brokerage firms. Net interest income was 103.63 bln rupees in Jan-Mar.
Most analysts expect the net interest margin to fall from a quarter ago because of a slight rise in cost of funds. The global net interest margin of the bank eased to 3.10% in Jan-Mar from 3.15% a quarter ago.
The outlook on business growth, margins, and credit cost would be the key monitorables, analysts said.
Today, shares of the bank closed 1% higher at 117.72 rupees on the National Stock Exchange.
Following are the Apr-Jun earnings estimates for Punjab National Bank from five brokerage houses:
| Brokerage firm | NII (in mln rupees) | Net profit (in mln rupees) |
| Emkay Global Financial Services Ltd | 104,086.0 | 31,543.0 |
| Kotak Institutional Equities | 105,586.0 | 32,100.0 |
| Motilal Oswal Securities Ltd | 103,500.0 | 30,100.0 |
| Nirmal Bang Institutional Equities | 107,770.0 | 27,143.0 |
| Sharekhan Ltd | 106,740.0 | 29,760.0 |
| Average | 105,536.40 | 30,129.2 |
End
Reported by Shubham Rana
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2024. All rights reserved.
To read more please subscribe
Share this Story:
