Punjab National Bank Q3 net profit up 67.3% at Rs1,250cr on the back of 36% fall in loan loss provisions

27 Jan 2022 , 07:10 PM

Punjab National Bank reported 3.14% yoy rise in total consolidated revenues in the Dec-21 quarter at Rs22,275cr. Revenues of PNB were down -4.74% on a sequential basis. In terms of top line revenues, PNB reported higher revenues in retail banking.

However, revenues from corporate banking was flat while the revenues from treasury was sharply lower on a yoy basis. The big driver of profitability in the quarter was a 36% fall in the loan loss provisions to Rs3,344cr.

For the Dec-21 quarter, the operating profits were down -19.32% at Rs5,083cr. During the quarter, the company saw a fall in income from interest, investment income and also interest on RBI balances.

The interest cost tapered to a lesser extent resulting in a negative spread leading to fall in operating income. Employee costs also went up sharply yoy.

Operating margin or OPM contracted from a level of 29.17% in Dec-20 to 22.82% in Dec-21 quarter. Operating margins were higher sequentially.

Profit after tax (PAT) for the Dec-21 quarter was up by 67.25% at Rs1,250cr. This was largely on account of the provisions for loan losses fall by 365 yoy from Rs5,224cr in Dec-20 quarter to Rs3,344cr in the Dec-21 quarter which boosted net profits Consequently, the PAT margins improved from 3.46% to 5.61% in the same period.

Gross NPAs at 12.88% still need to be worked on as it is too high in absolute terms and capital adequacy at 14.91% makes more fund raising mandatory for PNB.

Financial highlights for Dec-21 compared yoy and sequentially

	Punjab National Bank
Rs in Crore	Dec-21	Dec-20	YOY	Sep-21	QOQ
Total Income	₹ 22,275	₹ 21,597	3.14%	₹ 23,383	-4.74%
Operating Profit	₹ 5,083	₹ 6,300	-19.32%	₹ 4,136	22.90%
Net Profit	₹ 1,250	₹ 747	67.25%	₹ 1,104	13.19%
Diluted EPS	₹ 1.14	₹ 0.78		₹ 1.00
Operating Margins	22.82%	29.17%		17.69%
Net Margins	5.61%	3.46%		4.72%
Gross NPA Ratio	12.88%	12.99%		13.63%
Net NPA Ratio	4.90%	4.03%		5.49%
Return on Assets (Ann)	0.34%	0.15%		0.33%
Capital Adequacy	14.91%	13.88%		15.20%