Punjab National Bank's net profit slumps 70% on mark-to-market losses

BENGALURU: Public sector lender Punjab National Bank (PNB) reported a 70% drop in net profit to Rs 308 crore in the June quarter on the back of Rs 1,700 crore mark-to-market losses and a hit on its treasury income.

The Managing Director and CEO of the bank, Atul Kumar Goyal, told the media that the bank suffered mark-to-market losses to the tune of Rs 1,700 crore due to increase in interest rates. Also, the bank’s treasury income took a hit of Rs 600 crore in the June quarter year-on-year.

Total income of the bank in the first quarter of the current financial year was Rs 21,294 crore, down from Rs 22,816 crore in the same quarter the previous year. The net interest income of the bank grew by 4.27% during the quarter Rs 7,543 crore from Rs 7,234 crore the previous year.

Gross non-performing assets (NPAs) improved by 306 bps to 11.27% in the June quarter from 14.33% in previous year. Net NPA improved by 156 bps to 4.28% during the quarter from 5.84% the previous year. Goyal said that the bank is now aiming to bring down the gross NPA levels to single digits by the end of the current financial year.

He said that the bank’s capital adequacy ratio is at a comfortable level of 14.82% at the end of the June quarter (up from 14.50% in the previous year) , and that it does not require raising funds at the moment.