Earnings Review
PNB's PAT doubles as provisions fall, beats Street view
This story was originally published at 17:35 IST on 31 January 2025
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--PNB Oct-Dec net profit INR 45.08 bln vs INR 22.23 bln year ago
--Analysts saw PNB Oct-Dec net profit at INR 37.48 bln
--PNB Oct-Dec total income INR 347.52 bln vs INR 299.62 bln year ago
--PNB Apr-Dec net profit INR 120.63 bln vs INR 52.34 bln year ago
--PNB Apr-Dec total income INR 1.01 tln vs INR 879.24 bln year ago
--PNB gross NPA ratio 4.09% as on Dec 31 vs 4.48% qtr ago, 6.24% year ago
--PNB net NPA ratio 0.41% as on Dec 31 vs 0.46% qtr ago, 0.96% year ago
--PNB Oct-Dec NPA provisions INR 3.18 bln vs INR 29.94 bln year ago
--PNB: Hold additional provision of INR 9.92 bln as on Dec 31
--PNB: Made floating provision of INR 2.5 bln in Oct-Dec
--PNB: Provision Coverage Ratio at 96.77% as on Dec 31
--PNB: Oct-Dec net interest income INR 110.32 bln, up 7.2% on year
--PNB: Global deposits at INR 15.3 tln as on Dec 31, up 15.6% YoY
--PNB: Global advances at INR 11.10 tln as on Dec 31, up 14.8% YoY
--PNB: Oct-Dec global net interest margin 2.93% vs 2.92% in Jul-Sept
--PNB: Oct-Dec credit cost 0.12% vs 0.08% in Jul-Sept, 1.26% year ago
--PNB: CASA ratio at 38.12% as on Dec 31 vs 39.31% as on Sept 30
--PNB: Retail advances at INR 2.63 tln as on Dec 31, up 22.6% YoY
--PNB: Oct-Dec global cost of deposit 5.24% vs 5.18% quarter ago
--PNB: Oct-Dec fresh slippages INR 16.00 bln vs INR 15.94 bln year ago
--PNB: Oct-Dec cash recoveries INR 13.33 bln vs INR 18.28 bln yr ago
--PNB: Oct-Dec upgrades INR 6.40 bln vs INR 12.17 bln yr ago
--PNB: Oct-Dec recovery, upgrades INR 19.73 bln vs INR 30.46 bln yr ago
--PNB: Oct-Dec loan write-offs INR 19.69 bln vs INR 39.38 bln yr ago
By Christina Titus
MUMBAI – Punjab National Bank's net profit for the December quarter surged as provisions were down, beating analysts' estimates. The public-sector lender's net profit soared 103% on year to INR 45.08 billion during Oct-Dec. Sequentially, the net profit was up 5%.
Analysts had estimated the bank's bottom line to rise by over 68% on year to INR 37.48 billion during Oct-Dec because of falling provisions. Shares of the bank closed 4.9% higher at INR 101.20 on the National Stock Exchange. The bank announced its results during market hours.
The bank reported a provision write-back of INR 2.85 billion for the December quarter. In the previous quarter, the bank had made provisions of INR 2.88 billion. Provisions for non-performing assets fell 90% on year to INR 3.18 billion in the quarter.
The bank held additional provision of INR 9.92 billion for stressed assets mandated by the Reserve Bank of India's circular on Prudential Framework for Resolution of Stressed Assets. The public-sector bank made a floating provision of INR 2.5 billion in the reporting quarter, and the total floating provision stood at INR 7.5 billion as of Dec. 31. The bank's provision coverage ratio was 96.77% as of Dec. 31 compared to 94.28%% a year ago.
The bank reported total income of INR 347.52 billion for Oct-Dec, up 15% on year. However, total income was only marginally higher at 0.8% on quarter. In the reporting quarter, the bank's net interest income was up 7.2% on year at INR 110.32 billion and the global net interest margin also inched up slightly to 2.93% in Oct-Dec as compared to 2.92% in Jul-Sept.
For the nine months ended December, the Delhi-headquartered bank's net profit rose to INR 120.63 billion from INR 52.34 billion a year ago. Total income for Apr-Dec rose to INR 1.01 trillion from INR 879.24 billion in the corresponding period of the previous year.
On the asset side, the bank's global advances grew 14.8% on year to INR 11.10 trillion as of Dec. 31. Of the total advances, the share of advances to retail, agriculture, and micro, small, and medium enterprises was 56.3%, compared with 55.1% a year ago. The retail advances grew 22.6% on year to INR 2.63 trillion as of Dec. 31, agricultural loans rose 13.2% on year to INR 1.74 trillion, and loans to micro, small, and medium enterprises were at INR 1.59 trillion, up 10.7% on year. The corporate loan book showed 10.9% growth to INR 4.63 trillion as of Dec. 31.
The bank's asset quality showed significant improvement in the quarter, with the gross non-performing assets ratio declining to 4.09% from 4.48% a quarter ago and the net non-performing assets ratio improving to 0.41% from 0.46% a quarter ago. Though the net non-performing assets ratio has declined, the bank's fresh slippage rose slightly to INR 16.00 billion from INR 15.94 billion a year ago. The bank's credit cost increased to 0.12% from 0.08% in the previous quarter.
The bank recovered and upgraded accounts worth INR 19.73 billion for the quarter compared to INR 30.46 billion a year ago. The lender wrote off loans amounting to INR 19.69 billion in the reporting quarter, compared with loans amounting to INR 39.38 billion a year ago.
Global deposits outpaced loan growth on year at 15.6% to INR 15.3 trillion as of Dec. 31. The bank's current account deposit account ratio was at 38.12% as of Dec. 31, compared with 39.31% as of Sept. 30. The bank incurred a cost of deposit of 5.24% for Oct-Dec compared to 5.18% a quarter ago.
The bank's capital adequacy ratio improved to 15.41% as of Dec. 31 from 14.63% a year ago. During the quarter, the bank raised INR 30 billion through tier-II bonds and INR 50 billion through equity capital. End
Edited by Rajeev Pai
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