PNB gets a lift from non-core revenue streams

Loan quality continues to improve; sustainability of healthy profit growth appears difficult

Heightened focus on bad loans, as well as ramping up loan recoveries, has led to Punjab National Bank (PNB)'s asset quality inching upwards. This trend continued in December quarter (Q3). Incremental bad loans fell for the third quarter in a row sequentially at Rs 4,800 crore, the lowest in the past five quarters for the bank. Gross non-performing assets (NPAs) ratio remained largely unchanged sequentially at 13.7 per cent and has been in a tight band since June 2016 quarter. But the bank still has a long way to go and needs to sustain and improve this performance for a