How did you find the results of PNB and Bank of India for the Q4 of FY21?
Answer
Answer
PNB posted standalone net profit of Rs.568 crore in the Mar-21 quarter. This contrasts with a net loss reported worth Rs.697 crore in the Mar-20 quarter. There was a sharp yoy growth in the top line numbers with growth across treasury, retail banking and wholesale banking. This was largely on the back of the 3-way amalgamation wherein United Bank of India and Oriental Bank of Commerce got absorbed into PNB.
The net interest income or NII was up 48% at Rs.6,937 crore although the concern was on the front of the gross NPAs at an elevated level of 14.12%. Net NPAs at 5.73% indicate substantially provisions, but the loan loss levels are still too high for comfort of investors. PNB had a provisioning coverage ratio of 80.14%. Capital adequacy ratio at 14.32% is still quite precarious and hints at limited leeway to expand the asset book.
Bank of India also turned around but to a much lower net profit of Rs.72 crore. The turnaround in net profit of Bank of India was largely on account of a sharp fall in loan loss provisions which fell sharply from Rs.8,500 crore in Mar-20 quarter to just about Rs.1700 crore in the Mar-21 quarter. Like in the case of PNB, gross NPAs of OI at above 12% continues to remain at an unsustainable level.