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Punjab National Bank: Lower Slippages Help Stem Losses - Views on News from Equitymaster
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  • Aug 3, 2016 - Punjab National Bank: Lower Slippages Help Stem Losses

Punjab National Bank: Lower Slippages Help Stem Losses
Aug 3, 2016

Punjab National Bank (PNB) declared its results for the first quarter (1QFY17) and the financial year (FY17). While the net interest income fell by 9.8% YoY for the quarter, the net profit of the bank was down by 57.5%. Here is our analysis of the results.

Performance summary
  • Interest income fell by 3.8% YoY in 1QFY17.
  • Net interest margin (NIM) contracted by 0.45%.
  • Other income increased by 68.5% YoY in 1QFY17 on the back of recovery of written off accounts.
  • Net NPA (non-performing assets) to advances surged to 9.2% in 1QFY17 from 4.05% in 1QFY16 on account of the bank's clean-up exercise in line with RBI's Asset Quality Review over the last two quarters of FY16.
  • Capital adequacy ratio as per Basel III norms stands at 11.6% at the end of 30th June 2016.

    Financial performance snapshot
    Rs (m) 1QFY16 1QFY17 Change
    Interest income 120,347 115,749 -3.8%
    Interest expense 79,322 78,759 -0.7%
    Net Interest Income 41,025 36,990 -9.8%
    Net interest margin (%) 2.90% 2.45%
    Other Income 13,974 23,551 68.5%
    Other Expense 23,677 27,794 17.4%
    Provisions and contingencies 18,114 27,384 51.2%
    Profit before tax 13,207 5,362 -59.4%
    Tax 6,000 2,299 -61.7%
    Effective tax rate 45.4% 42.9% -5.6%
    Profit after tax/ (loss) 7,207 3,064 -57.5%
    Net profit margin (%) 6.0% 2.6%
    No. of shares (m) 1,964
    Book value per share (Rs)* 182.2
    P/BV (x) 0.7

    * (Book value as on 30th June 2016)

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