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Reflecting the listless economic environment, however, the bank’s total income grew marginally by 0.2 per cent to Rs 11,747 crore (Rs 11,721 crore).
The lacklustre first quarter results dragged the bank’s shares to a 52-week low of Rs 583 at the National Stock Exchange. The stock later closed at Rs 590.75.
Trading profit for the quarter under review zoomed to Rs 284 crore (Rs 88 crore). This was possible because of the significant drop in yields on 10-year Government securities during the most part of Q1.
The provision for non-performing loans (net of recovery) stood at Rs 675 crore (Rs 890 crore).
A large account —Winsome Diamonds — turned into a non-performing asset (NPA), leading to a provision of nearly Rs 400 crore on this count during this quarter, it is learnt. This added to the bank’s existing NPA woes.
“We have made all regulatory provisions (for our NPAs) and, in fact, a little more than what is required in some cases,” K.R. Kamath, Chairman and Managing Director, PNB, said. The bank is prudent when it comes to recognising bad loans and providing for it, senior officials said.
A marginal increase in net profit was possible despite the write-off of bad loans amounting to Rs 799 crore in April-June 2013. This write-off has been adjusted against cash recoveries of Rs 803 crore for the quarter under review.
The bank did not resort to write-offs in seven of the last eight quarters (in the last two fiscal years). In the March quarter, it had written off loans worth Rs 997 crore.
On the bank rate and domestic deposit rates, Kamath said there was no proposal to change these.
Capital infusion
Kamath said that PNB has sought capital support of Rs 1,500 crore from the Central Government. He also said that PNB would focus more on savings bank and retail term deposits in the coming days.
srivats.kr@thehindu.co.in
Source: thehindubusinessline
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