Punjab National Bank (PNB) Q1 profit jumps 231% to Rs 1,023 crore

New Delhi: State-owned Punjab National Bank (PNB) reported a net profit of Rs 1,023 crore in April-June, posting a 231 percent jump in its profit as compared to the CPLY. Sequentially, the net profit of the Delhi-based lender increased 74 percent from Rs 586 crore reported in Jan-March.

The bank’s net interest income (NII) increased 6.5 percent year-on-year to Rs 7,226 crore during the quarter on a standalone basis. NII is the difference between interest earned by a bank through lending and interest paid to depositors.

The reduction in provisions for bad loans and asset quality stability may have aided the lender’s earnings. Although the lender’s provisions remained almost flat at Rs 4,678 crore, provisions for non-performing assets (NPAs) dropped 32 percent year-on-year to Rs 3,248 crore. The bank’s gross non-performing assets increased to 14.33 percent as compared to 14.11 percent in the year-ago period. In Jan-March, the bank’s gross NPAs stood at 14.12 percent. Net NPAs of the state-owned lender was 5.84 percent in the April-June quarter as compared to 5.73 percent in Jan-March and 5.39 percent in April-June 2020.

The bank’s provision coverage ratio stands at 80.26 percent as on June 30, 2021. The lender has also said that the situation due to the Covid-19 pandemic continues to be uncertain, and is being evaluated continuously. “The extent to which the Covid-19 pandemic will impact PNB's results will depend on future developments, which are highly uncertain including among other things, the success of vaccination drive,” it said.

The major challenges, for the bank, would arise from eroding cash flows and extended working capital cycles, it said, adding that “the bank is gearing itself on all the fronts to meet these challenges.”

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