PNB posts a surprise loss in Q3; provisions spike

The state-run second-largest lender Punjab National Bank (PNB) reported a surprise standalone loss of Rs 492.28 crore for the October-December quarter compared with a profit of Rs 246.51 crore in the same period last year.

The lender was expected to see a spike in the profit number on account of recovering from an NCLT account.

The lender said provisions for the quarter jumped 73.25% on year to Rs 4,445.36 crore from Rs 2,565.77 crore.

Gross non-performing assets (GNPAs) eased to 16.3% in the December quarter from 16.33% in the year-ago quarter, and 16.76% in the September quarter.

Interest earned during the quarter rose 4.04% to Rs 13,562.69 crore from Rs 13,035.08 crore last year.

The lender’s total assets stood at Rs 8,20,779.98 crore in Q3FY20 against Rs 7,47,806.10 crore in Q3FY19.

Meanwhile, the Board of the lender in its meeting held on February 3, 2020, has granted permission for raising funds through the issuance of Basel-III compliant Tier-II Bonds amounting up to Rs 1,000 crore in one or more tranches.

Previously, in December, the bank had agreed to raise Rs 1,500 crore by issuing Basel III compliant bonds for business expansion.

The bank said there is no immediate plan to go to the Government for further capital raise. In fact, it is looking to raise Rs. 50 bn through either rights issue or QIP, for which an enabling board resolution has been taken.

The bank stated that the PNB Housing Finance stake sale process has not been able to materialize due to regulatory hurdles.

However, the bank will still continue to pursue monetization of its non-core financial and non-financial (old headquarters) assets. This would contribute towards the capital.

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