NEW DELHI: Scam-hit public sector lender Punjab National Bank (PNB) recorded Rs 507 crore profit in Q2, primarily on the back of lower provisioning requirements for bad loans. The bank had posted a whopping Rs 4,532 crore loss in the same quarter of the previous year.
According to the financials filed with the stock exchanges on Tuesday, the lender’s gross non-performing loan (NPA) level is still high, but has reduced from 17.16 per cent a year ago to 16.76 per cent in the quarter ended September 30.
Consequently, provisions for bad loans sharply declined to Rs 3,253.32 crore against Rs 7,733.27 crore the previous year, since the year-ago quarter had also included provisioning requirements towards the Rs 14,000 crore fraud committed by diamantaires Nirav Modi and Mehul Choksi.
Net NPAs have also come down during the period to 7.65 per cent as against 8.90 per cent in the year-ago period. According to newly-appointed managing director S S Mallikarjuna Rao, the focus the lender has placed on recovery operations will see net NPAs continuing to come down.
“If you look at the guidance, we are very confident that we can bring down the net NPA by March 2020 below 6 per cent,” he said.