PNB Q1 Result: Net soars 307% to Rs 1,255 crore on interest income

Punjab National Bank (PNB) recorded a significant increase in its standalone net profit, surging 307 per cent year-on-year (YoY) to Rs 1,255 crore in the 2023-24 (FY24) April-June quarter (first quarter, or Q1). This surge was fuelled by a 26 per cent rise in net interest income (the difference between interest earned and interest expended) to Rs 9,504 crore, along with a 9 per cent reduction in provisions for non-performing assets (NPAs) to Rs 4,374 crore.

Sequentially, the net profit of the Delhi-based public lender jumped 8.3 per cent from Rs 1,159 crore reported in the 2022-23 January-March quarter. 

When asked about the recovery from the attached properties of fugitive diamantaire Nirav Modi, PNB Managing Director and Chief Executive Officer Atul Kumar Goel stated that the bank plans to recover Rs 50-100 crore from the sale of properties during the ongoing quarter.

In a regulatory filing, the bank mentioned that a pending settlement of the bipartite agreement on wage revision (due from November 1, 2022) led to an ad-hoc amount of Rs 283.84 crore being provided during the quarter ended June 30, 2023, towards wage revision.

The bank’s asset quality demonstrated improvement, with gross NPAs as a percentage of gross advances dropping to 7.73 per cent, from 11.27 per cent a year ago. Net NPAs stood at 1.98 per cent, compared with 4.28 per cent a year ago and 2.72 per cent a quarter ago.

“The bank has revised its guidance on gross NPAs to 6.5 per cent by the end of FY24. The net NPAs have also been revised to 1 per cent or below by the end of FY24,” said Goel.

PNB’s total income during Q1 jumped by 34 per cent to Rs 28,579 crore, compared with Rs 21,294 crore a year ago, according to the lender’s exchange filing.

Interest income during the quarter amounted to Rs 25,145 crore, an increase from Rs 18,757 crore reported last year.

The bank’s global net interest margin in Q1 was 3.08 per cent, up from 2.79 per cent a year ago.

On a consolidated basis, the bank reported a net profit of Rs 1,342 crore in the quarter ended in June, against Rs 282 crore a year ago. The consolidated financial result of the bank includes five subsidiaries and 15 associates.

Advances by the bank grew by 16 per cent YoY, primarily due to the rise in retail and agricultural loans.

In the retail credit segment, personal loans and vehicle loans experienced the highest growth at 46 per cent and 27 per cent, respectively.

Goel announced that the bank aims for 12-13 per cent credit growth and 10-11 per cent deposit growth in FY24.

As of June 30, the capital adequacy ratio of PNB stood at 15.54 per cent, comfortably above the regulatory requirement of 11.5 per cent.