Dissappointing! PNB reports standalone net loss of 5,367.14 crore in Q4FY16 : Misses Estimates

The bank’s standalone Net Interest Income (NII) for the quarter stood at Rs. 2,767.71 crore, declining 27% yoy and 32.82% qoq

May 18, 2016 12:34 IST | India Infoline News Service
Punjab National Bank (PNB), financial services company, reported standalone net loss of Rs. 5,367.14 crore for the quarter ended March 31, 2016 against net profit of Rs. 306.56 crore in the corresponding quarter of the previous year and Rs. 51.01 crore in the preceding quarter. It's Net Interest Income (NII) for the quarter stood at Rs. 2,767.71 crore, declining 27% yoy and 32.82% qoq.

Gross non-performing assets (GNPA) for the quarter stood at 12.9% up 635 bps yoy and 443 bps qoq. Provisions at Rs.10,485.23crore were higher 173.47% yoy and 177.72% qoq.

For the year ended March 31, 2016, the bank reported net loss of Rs. 3,974.39crore as compared to net profit of Rs. 3,061.58 crore in the corresponding period of the previous year. It's NII for the current period of Rs. 15,311.78 crore was down 7.51% yoy. Provisions during the period at Rs. 17,954.23 crore were higher by 124.5% yoy.

PNB Q4 FY16– ‘As worse as it can get'

PNB reported another shocker in Q4 FY16 with Gross NPL ratio rising to 12.9% (our expectation was 10.5-11%) and therefore heavy provisioning (annualized overall credit cost at 10.3%) leading to a quarterly loss of mammoth Rs. 5,367 crore. Apart from the AQR, the bank ‘suo moto’ is likely to have indentified weak accounts in the stressed sectors during the quarter thus driving huge slippages. Higher provisioning on the flow has led to bank nearly sustaining the PCR at above 50%.Loan book growth was stable at 8.5% yoy. NII was down 33% qoq burdened by substantial interest reversals on the delinquencies. NIM is expected to have fallen sharply as compared to 2.8% in the preceding quarter. Overall PNB’s performance was quite worse than expected and would thus put pressure on earnings/BV estimates which were already lowered by a significant extent in Q3 FY16.

Result Highlights: (Rs. in crore)

Reported Results IIFL Estimates Variance (%)
Standalone Revenue 2767.71
Standalone Net Profit -5367.14 -60 -

Bloomberg estimated the company’s standalone net profit at Rs. 451.41 crore.

Stock Commentary:

Punjab National Bank is currently trading at Rs. 74.3, up by 0.5 points or 0.68% from its previous closing of Rs. 73.8 on the BSE.

The scrip opened at Rs. 72.55 and has touched a high and low of Rs. 77.2 and Rs. 72.1 respectively. So far 19834879(NSE+BSE) shares were traded on the counter. The current market cap of the company is Rs. 14491.35 crore.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 180.5 on 17-Aug-2015 and a 52 week low of Rs. 69.4 on 17-Feb-2016. Last one week high and low of the scrip stood at Rs. 82.3 and Rs. 73 respectively.

The promoters holding in the company stood at 62.08 % while Institutions and Non-Institutions held 31.16 % and 6.75 % respectively.

The stock is currently trading above its 200 DMA.

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