Why PNB's stock may not regain Street's confidence anytime soon

While Q3 numbers revealed some improvement in asset quality, the bank lags peers on this parameter

The December quarter (Q3) was a mixed bag for Punjab National Bank (PNB). The good news from the scam-hit public sector bank is that the impact of last year’s Nirav Modi fraud is fully captured. So, fresh pain from the incident is unlikely to arise. 

Moreover, the bank has returned to its profit making ways after three quarters of losses. Improvement in headline asset quality numbers is another positive takeaway. The government recently stated it won’t consider further consolidation of public sector banks (PSBs) through mergers, which also brought some relief to investors.

Yet, regaining the Street’s confidence may be