Bad loans hit PNB bottomline, investors too hit as the stock witnesses sharp fall

Punjab National Bank (PNB) declared its Q3FY16 results. The bank's interest income increased by 5.22 per cent to Rs 12221 crore in Q3FY16 as compared to same period in previous fiscal year. Its total expenditure increased by 8.07 per cent to Rs 10973 crore in Q3FY16 on a yearly basis.

PNB's Operating Profit Before Provisions and Contingencies rose by 6.08 per cent to Rs 2918 crore in Q3FY16 as compared to same period in previous financial year. The company's interest expense increased by 9.75 per cent to Rs 8101 crore in Q3FY16 on a yearly basis. Its Provisions And Contingencies increased by more than 2.5 times to Rs 3776 crore in Q3FY16 as compared to same period in previous fiscal year. PNB's net profit dropped by 93.41 per cent to Rs 51 crore in Q3FY16 on a yearly basis.

Considering segmental revenue front , PNB earned 28.08 per cent from Treasury operations segment, 45.36 per cent from Corporate and wholesale banking, 24.99 per cent from Retail banking segment and remaining 1.58 per cent from other banking operations segment during December 2015 quarter.

PNB's asset quality deteriorated more in Q3FY16. PNB's gross non-performing assets (npa) stands at 8.47 per cent amounting to Rs 34338 crore in Q3FY16 against 6.36 per cent amounting to Rs 24945 crore in Q2FY16. The bank’s net npa stands at 5.86 per cent to Rs 22983 crore in Q3FY16 while 3.99 per cent amounting to Rs 15187 crore in Q2FY16.

Considering nine month financials, PNB's revenue increased by 5.58 per cent to Rs 36600 crore in 9MFY16 as compared to same period in previous financial year. The bank's Operating Profit Before Provisions and Contingencies increased by 2.7 per cent to Rs 8989 crore in 9MFY16 on a yearly basis. Its net profit declined by 49.45 per cent to Rs 1393 crore in 9MFY16 as compared to same period in previous fiscal year.

The share price of PNB declined by 7.42 per cent on bourses; and closed at Rs 87.85 on an intraday basis.

PNB is public sector bank which provides various banking services, such as digital banking, personal banking, social banking, micro, small and medium enterprises (MSME) banking, agricultural banking, corporate banking, international banking or non-resident Indian (NRI), and financial services. The Bank offers digital banking services, such as PNB cash deposit machine, PNB mobile banking and PNB retail Internet banking; personal banking services, such as savings fund account, fixed deposit schemes and cards; social banking services.