Punjab National Bank Q3 Results: Profit Rises Threefold On Lower Provisions

• Net interest income up 12.1% at Rs 10,292 crore. (YoY)

• Net profit up 253.4% at Rs 2,222.8 crore. (Bloomberg estimate: Rs 2,009.7 crore) (YoY)

• Gross NPA: 6.24% vs 6.96% (QoQ)

• Net NPA: 0.96% vs 1.47% (QoQ)

Net interest income, or core income, for the lender was up 12.1% year-on-year and stood at Rs 10,292 crore. Other income, however, fell 19.8% to Rs 2,673.8 crore from the previous Rs 3,337.9 crore.

PNB's operating expenses declined to Rs 6,636 crore during the quarter from Rs 6,801 crore a year ago.

Asset quality for the lender improved, with the gross non-performing asset ratio falling 72 basis points quarter-on-quarter to 6.24%. The net NPA ratio, too, improved 51 basis points sequentially to 0.96% from the previous 1.47%.

Provisions other than tax and contingencies fell 41.8% year-on-year to Rs 2,739.1 crore. Those for NPAs fell 24% year-on-year to Rs 2,993.9 crore.

The lender made provisions of Rs 113.7 crore against AIF investments in the quarter ended December.

Due to the write-back of NPI provisions, total provisions and contingencies appear lower than NPA provisions for the quarter ended December 31, 2023 and the nine months ended December 31, 2023, the bank said.

The public sector bank's credit cost improved by 61 basis points to 1.26% in Q3 from 1.87% a year ago.

As of Dec. 31, the slippage ratio improved to 136 basis points, or 0.81% from a year ago.

Global business grew 10.8% year-on-year to Rs 22.9 lakh crore during Q3. Global deposits rose by 9.35% year over year, while global advances grew by 12.90% during the quarter.

Under advances, core retail advances grew 17.6% year over year to Rs 1.53 lakh crore. Loans to micro, small and medium enterprises rose 15.4% year over year to Rs 1.43 crore, and agriculture advances increased by 17.4% during the quarter.

Further, the bank reported its CASA ratio at 42.47% as of Dec. 31.

Total retail loans increased 19% year over year to Rs 2.14 lakh crore during the quarter. Within core retail credit, personal loans grew the fastest, by 30.9% on year, followed by growth in vehicle loans and housing loans.

The capital adequacy ratio for the quarter ended December stood at 14.63%, down 46 bps quarter-on-quarter.

Shares of Punjab National Bank were trading 0.78% higher at Rs 102.68 apiece as of 2:47 p.m. on BSE, post-results.

(This is a developing story.)