PNB posts Rs 4,750-crores loss in Q4

New Delhi: State-owned Punjab National Bank (PNB) on Tuesday reported narrowing of its loss by nearly 65 per cent to Rs 4,750 crore during the fourth quarter of fiscal ended March 2019, even after making adequate provisions towards the Nirav Modi fraud and non-performing assets (NPAs).

The scam-hit lender had posted highest ever loss of Rs 13,417 crore in the corresponding January-March period of 2017-18, due to fraud committed by jeweller duo Mehul Choksi and Nirav Modi.

The bank's total income during the March quarter of 2018-19 rose to Rs 14,725.13 crore from Rs 12,945.68 crore in the year-ago period.

It has earned a healthy operating profit of Rs 2,861 crore during the quarter and Rs 12,995 crore for the year as a whole indicating strong fundamentals, PNB Managing Director Sunil Mehta said while announcing financials here.

"We suffered a setback (Nirav Modi fraud) last year of which, 50 per cent provisioning was done last year and 50 per cent have been made this year.

We have taken a conscious step to clean up the book and take provision coverage ratio to a reasonably high level which gives high degree of safety to our stakeholders."

"So, almost all my net NPAs (non-performing assets), 75 per cent provision has already been made against that.

Few assumptions which we thought will happen during this quarter that didn't materialise.

In 2-3 major accounts which have already been resolved by the NCLT, they were on the table, but that money could not be unlocked as against that we had to make 100 per cent provisioning because of the aging," he said.

On the assets front, PNB witnessed improvement as the gross non-performing assets (NPAs) which were brought down to 15.50 per cent of gross advances at the end of March 2019, as against 18.38 per cent at the end of March 2018.

Net NPAs or bad loans also came down to 6.56 per cent as against 11.24 per cent in the year-ago period.

In absolute value, gross NPAs stood at Rs 78,472.70 crore at the end of the financial year 2018-19, lower than Rs 86,620.05 crore reported in 2017-18. Net NPAs were valued at Rs 30,037.66 crore as against Rs 48,684.29 crore.

Improvement in asset quality allowed the lender to park lesser amount towards provisioning for bad loans during the March quarter of 2018-19, which stood at Rs 9,153.55 crore. While in the year-ago period, it stood at Rs 16,202.82 crore.

"We have factored in the entire IL&FS slippages, we have made provisions for Jet Airways although the account is standard (as on March 2019)," he said without elaborating on exposure of the bank on individual account.

At the same time, fresh slippages came down significantly to Rs 5,130 crore during the quarter, compared with Rs 30,377 crore in the corresponding period a year ago.

With respect to accounts covered under the provisions of the Insolvency and Bankruptcy Code (IBC), the bank is holding total provision of Rs 11,940.15 crore as on March 31, 2019, (84.63 per cent of total outstanding) including additional provision of Rs 433.93 crore in said accounts made during the year ended March 31, 2019, it said.

Talking about the way forward, Mehta said the focus area would be recovery of NPAs, conservation of capital, rationalising operation and sale of non-core assets, among others.

The bank still has a handful of non-core assets and things are in process even if PNB Housing Finance does not go again. "We expect roughly Rs 1,000 crore from non-core asset sale," he said.