Punjab National Bank has reported moderate performance, below the street expectations in the quarter ended December 11. The Bank has reported marginal 6% increase in the Net Profit at Rs 1150.04 crore over 10% increase in NII at Rs 3536.64 crore in the quarter ended December 11. Operating profit was higher by 14% to Rs 2676.43 crore owing to 23% jump in the core fee income at Rs 768 crore and 170 bps dip in the cost to income ratio at 40.4%. However, two fold rise in provisions on standard assets (including restructured assets) and depreciation on investments at Rs 310 crore has moderated growth in the Net Profit.
Asset Quality
- Asset quality has slipped in the quarter under review with Gross NPA in absolute terms increasing by 42% y-o-y and 25% q-o-q to Rs 6441.79 crore. Net NPA spiked 84% y-o-y and 39% q-o-q to Rs 2901.38 crore in quarter under review.
- %GNPA stood at 2.42% in quarter under review against 2.03% a year ago and 2.05% a quarter ago. %NNPA stood at 1.11% against 0.72% a year ago and 0.84% a quarter ago. Provision coverage ratio stood at 70.01% at end of December 11 against 75.08% in quarter ended September 11.
Business Highlights
- Business of the bank has improved 21% y-o-y and 5% q-o-q to Rs 619122 crore in the quarter ended December 11.
- Deposits grew 23% y-o-y and 5% to Rs 356517 crore in quarter under review mainly on the back of 21% increase in the core deposits at Rs 270923 crore. CASA deposits grew 12% to Rs 125966 crore owing to 14% increase in the SA deposits at Rs 102705 crore. CASA ratio has declined from 39.7% at end of December 10 and 39.2% at end of March 11 to 36.2% in the quarter under review.
- Advances grew 19% y-o-y and 5% q-o-q to Rs 262605 crore in the quarter under review. Domestic gross advances grew 16% to Rs 246106 crore of which industry grew 16% to Rs 118324 crore, and Retail credit grew 20% y-o-y to Rs 26009 crore.
- Credit deposit ratio stood at 73.7% in quarter under review against 76.6% in the corresponding previous year.
- Yield on advances stood higher at 11.97% against 10.59% a year ago and 11.92% a quarter ago. Cost of deposits also inched up 6.74% against 5.20% a year ago and 6.52% a quarter ago. NIM stood at 3.88% for the quarter ended December 11 against 3.95% a quarter ago and 4.13% a year ago.
- CRAR of the bank stood at 11.48% with Tier I capital of 7.85% at end of December 11 against 11.90% with Tier I capital of 7.58% at end of December 10 and 12.23% with Tier I of 8.37% at end of September 11.
- Investment book grew 32% to Rs 116748 crore in the quarter under review. HTM book stood at Rs 84895 crore while that of AFS at Rs 29888 crore and HFT at Rs 2686 crore. Modified duration of AFS book is 2.68 while that of total portfolio was 4.32. SLR instruments constitute 28.05% of the investment book and SLR HTM to total SLR % constituted 88.82% of the book.
- Book Value per share has improved to Rs 741.83 at end of December 11 against Rs 617.28 in the corresponding previous year.
- Outstanding restructured assets stood at Rs 21526 crore at end of December 11 of which Rs 2353.7 crore slipped in to NPA's. The Bank has restructured Rs 521 crore of NPA's of which Rs 103 crore were upgraded to Standard assets taking up gradation to 19.9% at end of December 11.
- ROA stood at 1.11% for the quarter ended December 11 against 1.21% in the quarter ended September 11 and 1.27% in the quarter ended December 10. RONW stood at 19.57% against 22.40% a year ago and 21.57% a quarter ago.
Quarterly Performance
For the quarter ended December 11, Punjab National bank has reported 10% increase in NII at Rs 3536.64 crore, thanks to 33% increase in Interest earned at Rs 9481.03 crore. On the other hand, spike in the cost of deposits spiked up 154 bps to 6.74% has pushed up interest paid on deposits by 60% to Rs 5586 crore. Resultantly, interest expensed grew faster by 52% to Rs 5944.39 crore; there by restricted growth in NII. NIM was compressed 25 bps to 3.88%. Yield on advances inched up 138 bps to 11.97% in quarter under review.
Further, core non interest income increased 23% to Rs 768 crore while that of trading profit remained flat at Rs 87 crore and Dividend from liquid MF slipped 53% to Rs 8 crore in the quarter under review. The recovery from written off accounts have slipped 25% to Rs 92 crore. Thus primarily aided by growth in core non fee income, other income grew 11% to Rs 954.09 crore and led Net total revenues up 11% to Rs 4490.73 crore.
The employee cost inched up 3% to Rs 1263.62 crore and other operating expenses increased 13% to Rs 550.68 crore and led Operating expense up 6% to Rs 1814.30 crore. The cost to income ratio declined 170 bps to 40.4% and paved Operating profit up 14% to Rs 2676.43 crore.
The Bank has stepped up provisions for standard assets by 53% to Rs 167 crore and depreciation on investments by 225% to Rs 143 crore in quarter under review. Provisions towards NPA were marginally up 4% to Rs 579 crore. Resultantly, provisions and contingencies inched up 33% to Rs 946.10 crore. PBT was thus restricted by 6% to Rs 1730.33 crore. After accounting small 10 bps increase in effective tax rate at 33.5%, Net Profit was marginally up 6% to Rs 1150.04 crore.
Excluding treasury trading profit and depreciation on investments, Core operating profit was up 14% at Rs 2589 crore and Net Profit was up 15% to Rs 1205 crore in the quarter under review.
YTD Performance
For the nine months ended December 11, the bank has reported marginal 7% increase in Net Profit at Rs 3460.14 crore over 15% increase in NII at Rs 10104.49 crore. Spike in provisions and contingencies by 45% to Rs 2549.94 crore have moderated growth in Net Profit.
Punjab National Bank: Financial Results
| 1112 (3) | 1012 (3) | Var % | 1112 (9) | 1012 (9) | Var % | 1103 (12) | 1003 (12) | Var % |
| Interest Earned | 9481.03 | 7119.22 | 33 | 26748.28 | 19546.19 | 37 | 26986.48 | 21422.09 | 26 |
| Interest Expended | 5944.39 | 3915.83 | 52 | 16643.79 | 10767.86 | 55 | 15179.14 | 12944.02 | 17 |
| Net Interest Income | 3536.64 | 3203.39 | 10 | 10104.49 | 8778.33 | 15 | 11807.34 | 8478.07 | 39 |
| Other Income | 954.09 | 857.23 | 11 | 2926.62 | 2467.22 | 19 | 3612.58 | 3457.31 | 4 |
| Net Total Income | 4490.73 | 4060.62 | 11 | 13031.11 | 11245.55 | 16 | 15419.92 | 11935.38 | 29 |
| Operating Expenses | 1814.30 | 1710.61 | 6 | 5352.98 | 4697.38 | 14 | 6364.22 | 4761.92 | 34 |
| Operating Profits | 2676.43 | 2350.01 | 14 | 7678.13 | 6548.17 | 17 | 9055.70 | 7173.46 | 26 |
| Provisions & Contingencies | 946.10 | 713.89 | 33 | 2549.94 | 1764.05 | 45 | 2491.98 | 1421.50 | 75 |
| Profit Before Tax | 1730.33 | 1636.12 | 6 | 5128.19 | 4784.12 | 7 | 6563.72 | 5751.96 | 14 |
| EO | 0.00 | 0.00 | 0 | 0.00 | 0.00 | 0 | 0.00 | 152.82 | 0 |
| PBT after EO | 1730.33 | 1636.12 | 6 | 5128.19 | 4784.12 | 7 | 6563.72 | 5904.78 | 11 |
| Provisions for tax | 580.29 | 546.25 | 6 | 1668.05 | 1551.52 | 8 | 2130.22 | 1999.43 | 7 |
| Net Profit | 1150.04 | 1089.87 | 6 | 3460.14 | 3232.60 | 7 | 4433.50 | 3905.35 | 14 |
| EPS*(Rs) | 145.2 | 137.6 | | 145.6 | 136.0 | | 139.9 | 123.3 | |
* Annualized on current equity of Rs 316.81 crore. Face Value: Rs 10
Figures in Rs crore
Source: Capitaline Corporate Database |