NEW DELHI: The after-effects of fraud by Mehul Choksi and Nirav Modi continued to spill over the performance of Punjab National Bank (PNB) in the first quarter, as the bank, continue to report a loss of Rs 940 crore in June Quarter against a profit of Rs 343 crore in the same period last year.
Gross NPAs were at 18.26 per cent in the first quarter as against 13.66 per cent in the year-ago period and 18.38 per cent in the preceding quarter. Net NPAs were at 10.58 per cent in the June quarter as against 8.67 per cent in the year-ago quarter and 11.24 per cent in the preceding quarter.
Provisioning for NPAs stood at Rs 4,981 crore in this quarter as against Rs 2,559 crore in the year-ago period and Rs 16,202 crore in the last quarter. It was partly for providing for the Nirav Modi accounts (Rs 1,863.46 crore) and partly for improving the provision coverage ratio of the bank.
However, the bank managed to cover a substantial portion of the loss by improving performance, focussed loan strategy and series of cost-cutting measures, including shutting international and domestic branches.
In the last quarter of 2017-18, PNB had reported a loss of Rs 13,417 crore on account of fraud- related payout to other bank, high NPAs and losses in the bond portfolio and market capitalisation.
Net interest margin, a key measure of profitability, improved to 2.9 per cent from 2.56 per cent in the year-ago period. Net interest income was up 21.7 per cent to Rs 4,692 crore.
“The bank has been prompt in taking corrective measures. PNB has done introspection and looked at ways to ensure that systems are strengthened,” said Sunil Mehta, managing director and chief executive officer of PNB, at a press conference.
Mehta added that in future the focus of will be on NPA recovery and the has targeted to achieve Rs.20,000 crore from recoveries. The bank has already set up a stressed assets management vertical to recover bad loans.