PNB's net profit surges over 3-fold to Rs 2,223 crore

New Delhi: Public sector lender Punjab National Bank (PNB) on Thursday reported over a three-fold jump in net profit to Rs 2,223 crore in the December quarter -- the highest in the last 15 quarters -- on the back of higher interest income and improved asset quality.

The bank had earned a net profit of Rs 629 crore in the same quarter a year ago.

Its total income increased to Rs 29,962 crore during the quarter under review against Rs 25,722 crore in the same period last year, PNB said in a regulatory filing.

The bank's interest income rose to Rs 27,289 crore compared to Rs 22,384 crore in the third quarter of the previous fiscal.

The bank's net interest income grew about 12 per cent to Rs 10,293 crore against Rs 9,179 crore in the same quarter a year ago.

On the asset quality front, the bank's gross non-performing assets (NPAs) declined to 6.24 per cent of the gross loans at the end of December 2023 from 9.76 per cent a year ago.

Similarly, net NPAs or bad loans came down to 0.96 per cent from 3.30 per cent at the end of the third quarter of the previous fiscal.

As a result, provisions for bad loans declined to Rs 2,994 crore from Rs 3,908 crore in the same quarter a year ago.

PNB MD and CEO Atul Kumar Goel said the high quarterly number in the third quarter can be attributed to an improvement in net interest income and a reduction in NPA provisions.

The bank's net interest margin improved to 3.11 per cent against 3 per cent at the end of the third quarter of the previous fiscal.

Asked about the net interest income outlook, he said it would be between 2.9- 3 per cent for the entire fiscal.

Its capital adequacy ratio came down to 14.63 per cent compared to 15.15 per cent at the end of December 2022.

The decline is due to healthy credit growth, Goel said, adding that the bank could raise capital from Tier I bonds this quarter if required, to support growth.

The bank is expecting 12-13 per cent credit growth during the current financial year, he added.

He also said the board has already given approval for raising Rs 7,500 crore equity capital through follow-up public offering (FPO) or qualified institutional placement (QIP) in the next financial year.

During the quarter, he said, the bank has made a total recovery of Rs 6,387 crore against Rs 6,035 crore a year ago.

Goel said the trend would continue in the fourth quarter as well and the recovery should be around Rs 6,000 crore.

Against the target of Rs 22,500 crore for the current financial year, the bank has made a recovery of Rs 17,000 crore in the first nine months.