PNB Q1 consolidated net up 207% at ₹3,716 crore driven by lower NPAs

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Aided by strong operational performance and lower NPA provisioning, Punjab National Bank (PNB) on Saturday reported a 207 per cent increase in consolidated net profit for the first quarter ended June 30 at ₹3,716 crore (₹1,211 crore).

The latest bottomline performance of country’s second largest public sector bank is also higher than the consolidated net profit of ₹3,101 crore recorded in March quarter. 

Commenting on the Q1 financial performance, Atul Kumar Goel, Managing Director & CEO, said the latest quarterly performance of net interest income, operating profit and net profit was the highest-ever recorded in the history of the bank after the amalgamation of two other banks. 

“We have been able to achieve this primarily due to two focus areas of digital transformation and HR transformation undertaken by the bank in the last two years,” Goel said. 

Consolidated total income of the bank for the quarter under review stood at ₹32,760 crore (₹29,033 crore). Consolidated operating profit was at ₹6,654 crore (₹5,934 crore). 

Provision for non performing assets (NPA) for the quarter under review was sharply down at ₹781 crore (₹4,363 crore). 

On a standalone basis, PNB’s net profit more than doubled to ₹3,252 crore (₹1,255 crore). Total income in the quarter rose to ₹32,166 crore from ₹28,579 crore, PNB said in a regulatory filing with stock exchanges. 

REVISED GNPA GUIDANCE 

Encouraged by strong Q1 financial performance, PNB has revised its guidance on Gross Non Performing Assets (GNPA) to 4 per cent of advances against earlier aim of 5 per cent. Gross NPA has reduced from ₹70,899 crore in June 2023 to ₹ 51,263 crore in June 2024. In March 2024, it was ₹56, 343 crore. In percentage terms, it has come down from 7.73 in June 2023 quarter to 5.73 per cent in March 2024 quarter and now to 4.98 per cent in June 2024 quarter. Net NPA for the quarter under review reduced to 0.60 per cent and Provision Coverage Ratio increased to 95.90 per cent, Goel said. 

BUSINESS MIX 

Goel also highlighted that gross business of the bank has increased to ₹24.36 lakh crore, up 10 per cent. This is the first-time ever overall business mix of the bank has crossed ₹24 lakh crore, Goel added. 

Gross advances grew 12.2 per cent to ₹10.28 lakh crore as of end June 2024. For current fiscal, PNB is aiming at credit growth of 11-12 per cent and deposits growth of 9-10 per cent.

CAPITAL RAISING 

On capital raising, Goel said PNB has now decided to raise ₹5,000 crore via qualified institutional placement (QIP) against earlier guided level of ₹7,500 crore. 

PNB already has board approval to raise ₹17,500 crore capital this fiscal including ₹7,000 crore of AT1 capital and ₹3,000 crore of Tier-II bonds.

Asked about the challenges faced by the bank, Goel said there is no big challenge other than “cybersecurity”. He, however, added that the bank was proactively addressing this issue on multiple fronts. 

He also noted that slowdown in CASA (current account and savings account) is a concern for industry, but quickly added that the situation is much better for PNB.