PNB Q2 Profit Registered at Rs 507 Cr as Provision Eases

State-owned Punjab National Bank (PNB) reported a profit of Rs 507.06 crore for the second quarter ended September 30 aided by a substantial reduction in provisioning for bad loans.

The lender had posted a loss of Rs 4,532.35 crore in the corresponding July-September quarter last year.

During the quarter, provisions for bad loans sharply declined to Rs 3,253.32 crore against Rs 7,733.27 crore in July-September 2018. The provisions during the year-ago period included the amount for the Rs 14,000-crore fraud committed by jeweler duo Nirav Modi and Mehul Choksi.

Gross non-performing assets (NPAs) amounted to 16.76 per cent of the gross advances at the end of September, lower than 17.16 percent a year ago.

Net NPAs or bad loans also came down to 7.65 per cent as against 8.90 per cent in the year-ago period. Going forward, the focus on recovery will help bring down the net NPA to the comfort level of the Reserve Bank of India (RBI) by the end of the current fiscal, newly-appointed PNB managing director SS Mallikarjuna Rao said after announcing the quarterly numbers here.

“If you look at the guidance, we are very confident that we can bring down the net NPA by March 2020 below 6 per cent,” he said.

Rao, who was appointed the head of the country’s second largest lender last month, has set an ambitious recovery target of Rs 24,000 crore for the entire fiscal.