PNB shares fell sharply due to a spike in its gross NPAs during the June quarter, raising concerns about its asset quality. According to a brokerage, half of the Bank's NPAs are from gems and jewellery sector
Punjab National Bank (PNB) shares hit its four-year low to Rs584.4 on Friday due an increase in its non-performing assets (NPAs) during the June quarter. On 12 June 2009, PNB shares closed at Rs594.95 while it hit its all-time high to Rs1,384.35 on 9 November 2010 on the BSE. Although the lender reported 2.3% growth in its June quarter net profit, its deteriorated asset quality, especially exposure to gems and jewellery has emerged a cause of concern for the state-run Bank.
During the quarter to end-June, PNB said its gross NPA, as a percentage of advances grew to 4.84% from 3.34% same period last year. During the March quarter, its gross NPA was at 4.27%.
"On the asset quality front, the bank found no respite on asset quality pressures, as slippages during the quarter came in at Rs3,594 crore, almost half of it contributed by a single exposure to gems and jewellery sector. Consequently, the bank's gross NPA levels jumped up sequentially by 12%," said a brokerage in a note.
During the first quarter, PNB said its net profit increased 2.3% to Rs1,275 crore from Rs1,246 while net interest income (NII) grew to Rs3,908 crore from Rs3,693 crore, same period last year. The lender reported total revenues, including NII, of Rs11,746.6 crore, a marginal increase from Rs11,721.97 crore same quarter a year ago.
PNB closed Friday 5.2% down at Rs595 on the BSE, while the 30-share Sensex ended marginally down at 19,748.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
