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Public sector Punjab National Bank (PNB) has reported a 66% YoY decline in its profits for the quarter ended in March 2022.
The standalone profit for this quarter stood at Rs 202 crores against Rs 586 crores in the same quarter last year. Its standalone total income stood at Rs 21,095 crores, down about 1.4% YoY.
On a consolidated basis, the bank's net profit during the quarter was down 55% to Rs 245 crores against Rs 547 crores last year. Total quarterly consolidated income also saw a decline as it fell from Rs 21,633.84 crores to Rs 21,350.59 crores, falling about 1.3%.
The bank's interest income during the quarter was marginally lower than last year's figure but its net interest income recorded a 5% growth as it reached Rs 7,305 crores. The bank's asset quality showed significant improvement as Gross NPAs improved from 14.12% last year to 11.78% this year. Net NPAs recorded similar improvement as they improved from 5.73% last year to 4.8% this quarter.
The main reason for reporting lower profits is the higher provisions that the bank has set aside for bad loans and contingencies. The provisions created this year came in at Rs 4,851.47 crores, up 37% from last year's Rs 3,540.32 crores.
The Board of Directors of the company has recommended a final dividend of Rs 0.64 per share or 32%, subject to shareholders' approval at the AGM. PNB seems to be a bad choice of investment for investors as the stock has been in decline for a while. The stock has registered a 24% decline since the beginning of 2022.
On account of disappointing results, the stock opened down 6% as it witnessed a full gap down opening. The stock continued falling as it fell a further 6.5% and currently trades around Rs 29.20 per share, a price level the stock hasn't reached since November 2020!!
Article by Aman Agarwal.
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