PNB: Posts Biggest-Ever Loss In Banking Industry
NEW DELHI: Punjab National Bank (PNB) on Wednesday posted a loss of Rs 5,367 crore for the March quarter, notching up the dubious distinction of reporting the biggest-ever quarterly loss by a domestic lender. Delhi-based Punjab National Bank joined a string of other state-run lenders that have reported huge losses on account of rising bad loans.
Punjab National Bank’s huge loss was on account of Rs 10,485 crore provision that the lender made for bad loans. PNB’s total non-performing loans jumped to Rs 55,818 crore in the March quarter against Rs 34,338 crore in the December quarter.
In the previous quarter, Punjab National Bank had set aside Rs 3,776 crore to provide for bad loans, which led to a Q3 loss of Rs 510 crore.Punjab National Bank would have posted a bigger loss, but for the tax write-back of Rs 1,890 crore in the March quarter.
Analysts said PNB’s numbers are a big cause of worry for the banking system. Domestic lenders have seen a surge in bad loans after a cleanup ordered by Reserve Bank of India. The central bank wanted banks to classify some troubled accounts as non-performing and make adequate provisions for those over the December and March quarters.
“The last quarter was a disaster and this is also equally bad. The question is one does not see when the problem ends,” said Gaurang Shah of BNP Geojit Paribas.PNB shares traded flat despite disappointing numbers, but experts said investors should not buy the stock.
“I will not buy the stock at all… The valuation of the stock comes to just Rs 24 and the stock is trading at three times,” said G Chokkalingam of Equinomics Research & Advisory.As of 1.05 p.m., PNB shares traded 0.14 per cent higher at Rs 73.90 as compared to 0.32 per cent fall in the Nifty Bank.
