Net NPAs of Punjab National Bank jumped to Rs7,883.43 crore from Rs2,088.51 crore in the year ago period while its NPA provisioning jumped 257% to Rs1,140 crore during the July-September quarter
New Delhi: State-owned Punjab National Bank (PNB) on Friday reported a 11.6% drop in net profit to Rs1,065 crore on account of higher provisioning for bad loans in the September quarter, disappointing investors as its shares fell about 7%, reports PTI.
The country's second largest state-run lender by assets had a net profit of Rs1,205 crore in the July-September quarter of 2011-12 fiscal.
"The results are not as per our expectation," PNB Chairman KR Kamath told reporters.
The net non-performing assets (NPAs) or bad loans as a percentage of total assets rose to 2.69% in the July-September quarter, from 0.84% during the same period a year ago.
"It is a reflection of what is happening in the economy. It is difficult to say whether the worst is over. It all depends on how economy behaves in next 3-6 months," he said.
In absolute term, the net NPA of the Delhi-based bank jumped to Rs7,883.43 crore in the July-September quarter, from Rs2,088.51 crore in the year ago period.
During the quarter the bank provisioning towards NPAs stood at Rs1,140 crore, a 257% jump over Rs319 crore provisioned in the September quarter of last fiscal.
"Higher provisioning is on account of higher NPA slippage. In some way it is a reflection of what is happening in the economy," Kamath said.
Shares of Punjab National Bank slipped sharply on the earnings as NPAs rose. PNB's shares ended at Rs748 on the BSE, down 7% from previous close.
Many PSU lenders have exposure to debt-laden firms like Kingfisher Airlines, Deccan Chronicle, the beleaguered state electricity boards and power and infrastructure projects.
"Whereever investments are not in a position to generate income, the government has to work to reduce bottlenecks else banks will have to take a hit in their books," Kamath said.
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