The Punjab National Bank (PNB), India’s second largest state lender by assets, reported a surprise gain in the quarter from October to December, helped by a lower provision for bad loans. The net profit of Punjab National Bank increased by 7.12 percent annually to Rs. 246.51 million rupees, according to a regulatory presentation by the lender. Net profit surprised analysts amid expectations of a net loss. Analysts had estimated on average the bank’s loss in Rs. 1063 crore, the Reuters news agency reported that he quoted the data of Refinitiv Eikon.
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The benefit was due to a sharp fall in provisions for bad loans. Provisions decreased 67 percent to Rs. 2,565.77 crore against Rs. 7,733.27 crore in the previous quarter.
“We are back in (the) black, after the provisions of 100% for all our commitments,” said PNB CEO Sunil Mehta at an earnings briefing. He also said that the recovery around Rs. 16,000 million rupees in the quarter helped the bank improve its performance.
During the quarter, the quality of the bank’s assets improved as its percentage of unprofitable gross assets decreased to 16.33 percent from 17.16 percent sequentially and the percentage of unprofitable net assets decreased to 8.22 percent from 8.90 percent. percent in the September quarter.
Punjab National Bank also said that in the December quarter, it provided Rs. 2,014.04 crore to make full provisions for the fraud that was detected at its Brady House branch in the quarter ended March 2018.
The bank reported losses for three consecutive quarters after the scam, due to higher provisions. This included the highest quarterly loss of an Indian bank in the March quarter of last year.