InvestorQ : Can you give me your quick view on the quarterly results of PNB for Dec-21 quarter?
vaishnavi mhatre made post

Can you give me your quick view on the quarterly results of PNB for Dec-21 quarter?

Answer
image
vidhya Laxmi answered.
4 months ago
Follow

PNB reported strong numbers for the Dec-21 quarters and the bottom line was supported by the lower provisioning for doubtful debts. This kind of compensated and made up for the profit impact of lower interest spreads in the quarter. Yields fell sharply although interest costs didn’t. Here is a summary of PNB performance in the Dec-21 quarter.

Punjab National Bank

Rs in Crore

Dec-21

Dec-20

YOY

Sep-21

QOQ

Total Income

₹ 22,275

₹ 21,597

3.14%

₹ 23,383

-4.74%

Operating Profit

₹ 5,083

₹ 6,300

-19.32%

₹ 4,136

22.90%

Net Profit

₹ 1,250

₹ 747

67.25%

₹ 1,104

13.19%

Diluted EPS

₹ 1.14

₹ 0.78

₹ 1.00

Operating Margins

22.82%

29.17%

17.69%

Net Margins

5.61%

3.46%

4.72%

Gross NPA Ratio

12.88%

12.99%

13.63%

Net NPA Ratio

4.90%

4.03%

5.49%

Return on Assets (Ann)

0.34%

0.15%

0.33%

Capital Adequacy

14.91%

13.88%

15.20%

Let me talk about the top line first. Punjab National Bank reported 3.14% higher revenues in the Dec-21 quarter at Rs.22,275 crore. The bank reported higher revenues in retail banking vertical. However, revenues of the corporate banking vertical was flat while treasury income was sharply lower on a yoy basis due to rising bond yields. The big trigger for profit growth was the 36% lower loan loss provisions at Rs.3,344 crore for the third quarter.

The impact of the weak spreads was visible in the operating profits falling by -19.32% at Rs.5,083 crore in the Dec-21 quarter. PNB saw fall in income from interest income, investment income and also interest on RBI balances. At the same time, the interest cost did taper to the same level, resulting in a negative spread. OPM contracted from 29.17% in Dec-20 to 22.82% in Dec-21 quarter. However, OPM was higher on sequential basis.

Profit after tax was up by 67.25% at Rs.1,250 crore in the Dec-21 quarter and the story was all about lower los provisioning in this quarter compared to last year. This boosted net profits despite unfavourable net interest margin situation. The provisions for loan losses fell 36% from Rs.5,224 crore in Dec-20 quarter to Rs.3,344 crore in Dec-21 quarter. This can be seen as a gradual improvement in the asset quality in the quarter.

PAT margins saw an upgrade from 3.46% to 5.61% on a yoy basis. However, there are still concerns over the gross NPAs at 12.88%; tad too high in absolute terms. The other concern for the bank is the low level of capital adequacy at just about 14.91%, which is much lower than private banking peers like HDFC Bank, ICICI Bank and Axis Bank. This makes fund raising essential for PNB in medium term so investors must be prepared for dilution.

24 Views