Punjab National Bank Q3 net profit plunges as bad loans surge

MUMBAI (Reuters) - Punjab National Bank, India's fourth-biggest state-run lender by assets, reported on Tuesday its fiscal third-quarter profit fell 93 percent as provisions for bad loans jumped.

Its shares fell more than 6 percent after the results.

Net profit tumbled to 510.1 million rupees ($7.5 million) for the three months to Dec. 31 from 7.75 billion rupees a year earlier, the lender said in a regulatory filing. Analysts on average had expected a net profit of 7.07 billion rupees, according to data compiled by Thomson Reuters.

Gross bad loans as a percentage of total loans were 8.47 percent at end-December, compared with 6.36 percent in the previous quarter. Provisions, including for bad loans, more than doubled from a year earlier to 37.76 billion rupees.

 

The Reserve Bank of India has asked commercial lenders to downgrade some troubled accounts to bad and make required provisions by the March quarter as part of its efforts to clean up bank balance sheets.

($1 = 68.1775 Indian rupees)

(Reporting by Devidutta Tripathy; Editing by Subhranshu Sahu)