Punjab National Bank Q4 Results: Profit More Than Doubles On Lower Provisions

Punjab National Bank's profit more than doubled in the fourth quarter of fiscal 2024, beating analysts' estimates.

The public sector lender's standalone net profit rose 159% year-on-year to Rs 3,010.2 crore in the quarter-ended March, according to an exchange filing on Thursday. Analysts polled by Bloomberg had estimated a net profit of Rs 2,276.99 crore.

Net interest income, or core income, of the bank rose 9% year-on-year to Rs 10,363 crore. Other income rose 24.1% year-on-year to Rs 4,247.6 crore.

Total income for the quarter was up 18.6% year-on-year to Rs 32,361.04 crore.

PNB Q4 Results Highlights (Standalone)

• Net interest income up 9% to Rs 10,363 crore (YoY).

• Net profit up 159% to Rs 3,010 crore (Bloomberg estimate: Rs 2,276.99 crore) (YoY).

• Gross NPA at 5.73% vs 6.24% (QoQ).

• NNPA at 0.73% vs 0.96% (QoQ).

Asset quality for the lender improved with gross non-performing asset ratio down 51 basis points sequentially to 5.73%. Net NPA ratio, too, improved to 0.73%, as compared with 0.96% in the previous quarter.

Provisions (other than tax and contingencies) were down 58.5% year-on-year to Rs 1,588.05 crore. Of these, provisions for NPAs were down 45.9% to Rs 1,957.9 crore.

The lender explained that the provisions and contingencies for FY24 include Rs 238.68 crore (net) towards additional provision on standard accounts, restructured under Covid-19 resolution framework 1.0 and 2.0. During Q4, it also made a floating provision of Rs 150 crore.

In Q3, the lender made a provision of Rs 113.67 crore towards alternative investment funds. However, in the quarter-ended March, it has reversed provision of Rs 102.28 crore with regards to AIFs and is holding a provision of Rs 11.39 crore as on March 31.

Capital adequacy ratio for the quarter stood at 15.97%, as compared with 14.63% in the previous quarter. Here, the CET-1 ratio stood at 11.04%.

In a post-results press conference, the bank's MD and CEO Atul Kumar Goel said that the improvement in CAR is due to the profit earned and rise in tier-1 capital in Q3.

He guided for credit cost to be below 1% in FY25.

The lender's global deposits grew 6.9% YoY to Rs 13.69 lakh crore. Here, the savings deposits increased 3.5% YoY to Rs 4.80 lakh crore and current deposits grew to Rs 72,201 crore.

CASA deposits of the public sector bank rose 2.7% YoY to Rs 5.52 lakh crore. Of these, retail term deposits grew 9.5% YoY to 5.62 lakh crore.

Goel told reporters that the bank expects a deposit growth at 9-10% and credit growth at 11-12% in FY25.

The global advances increased 11.2% YoY to Rs 9.83 lakh crore. The bank's core retail grew 15.2% YoY. Here, the housing loan rose by 14.5% YoY to Rs 93,694 crore, vehicle loans grew 25.6% YoY to Rs 20,692 crore and personal loans increased 14.4% YoY to Rs 20,766 crore.

The bank's domestic NIM stood at 3.25% in Q4. The NIM guidance for FY25 stays at 2.9-3%, as earlier.

"Our effort will be that the QoQ NIM increases in absolute numbers," he said.

In the media call, Goel said, "We have received the board's approval for a QIP of Rs 7,500 crore... We are in the process of raising this amount in next six months; have also appointed merchant banks."

In terms of IT expenses at the bank, Goel said that for FY24, the bank's IT budget was Rs 2,800 crore, but for FY25, it has been kept at Rs 2,900 crore.

Responding to reporters' queries on RBI's draft guidelines on project financing, Goel said that since it is only a draft, it is a consultative process.

"...there is no immediate need to panic," he said. The bank would, however, clarify from the regulator if the guidelines would be applicable to small loans and hence, it would submit its response to RBI soon.

The bank's board recommended a dividend of Rs 1.50 per share of face value of Rs 2 each for FY24, subject to necessary approvals.