Punjab National Bank (PNB) shares dropped by 5.8% in intra-day trade on Tuesday after the lender reported net profit at Rs 507.10 crore in the second quarter ended September (Q2) along with deterioration in asset quality.
The PNB shares closed the session at Rs 64.60, down 5.3%, after hitting an intra-day low of Rs 64.25. Notably, the stock has fallen nearly 25% in the past six months.
PNB’s Q2 net profit figure for the September quarter was better than expected, with an analysts’ poll conducted by CNBC-TV18 expecting the bank to report a loss of Rs 1,521.5 crore. PNB had reported a loss of Rs 4,532.35 crore in the year-ago period due to a spike in provisions.
Net interest income (NII) also increased 7.3% year-on-year to Rs 4,263.8 crore in the September quarter. Non-interest income jumped 32.5% to Rs 2,264.7 crore, too, pushing up pre-provision operating profit by 25.4% to Rs 3,562 crore compared to the year-ago quarter.
However, PNB’s asset quality deteriorated in the September quarter. Gross non-performing assets (NPA) as a percentage of gross advances rose 27 basis points sequentially to 16.76%, while net NPA climbed 48 basis points to 7.65%.
Provisions and contingencies for bad loans for the September quarter also jumped by a massive 48% to Rs 2,928.9 crore when compared with the previous quarter. However, they were down 70% compared with a year ago. Provision coverage ratio declined to 73.58% at the end of the September quarter compared with 74.6% at the end of June quarter.
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