Punjab National Bank Posts Biggest-Ever Loss In Banking Industry

Punjab National Bank (PNB) on Wednesday posted a record loss of Rs 5,367 crore for the March quarter, notching up the dubious distinction of reporting the biggest-ever quarterly loss by a domestic lender.

Delhi-based Punjab National Bank joined a string of other state-run lenders that have reported huge losses on account of rising bad loans.

Analysts said PNB’s numbers are a big worry for the domestic banking system, which has seen a surge in bad loans after a cleanup ordered by Reserve Bank of India. The central bank wanted banks to classify some troubled accounts as non-performing and make adequate provisions for those over the December and March quarters.

Punjab National Bank’s huge loss was on account of Rs 10,485 crore provision that the lender made for bad loans. The higher provisioning was necessitated because PNB’s total non-performing or bad loans jumped to Rs 55,818 crore in the March quarter from Rs 34,338 crore in the December quarter.

In the previous quarter, Punjab National Bank had set aside Rs 3,776 crore to provide for bad loans, which led to a Q3 loss of Rs 510 crore.

Punjab National Bank would have posted a bigger loss, but for the tax write-back of Rs 1,890 crore in the March quarter.

Gaurang Shah of Geojit BNP Paribas said, “Last quarter was a disaster, this quarter equally…there are issues and I would want to hear the management commentary in terms of when do they expect these problems to end.

PNB however said its balance sheet clean-up is not complete yet, which means that the lender may continue to struggle with high bad loans for a few more quarters.

Andrew Holland, CEO of Ambit Investment Advisory, tweeted, “Can’t say PNB CMD gave me any confidence that it’s going to get better for the bank.

PNB shares closed 3.3 per cent higher at Rs 76.20 as compared to 0.3 per cent fall in the Nifty.

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Source:Ndtv

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