PUNJAB & SIND BANK 2022-23 Annual Report Analysis

Wed, 21 Jun

PUNJAB & SIND BANK has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the bank during the year 2022-23.

PUNJAB & SIND BANK Income Statement Analysis

• Interest income during the year rose 12.6% on a year-on-year (YoY) basis.
• Interest expenses were up by 12.9% YoY during the same period.
• Operating expenses increased by 8.0% YoY during the year.
• The bank's net interest income (NII) increased by 12.1% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 2.4% in FY23 as against 2.5% in FY22.
• Other income declined by 2.0% YoY during the year.
• Net profit for the year increased by 26.4% YoY.
• Net profit margins during the year increased to 16.4% in FY23 from 14.6% in FY22.

PUNJAB & SIND BANK Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	70,958	79,927	12.6%
Other Income	Rs m	9,594	9,400	-2.0%
Interest Expense	Rs m	44,445	50,194	12.9%
Net Interest Income	Rs m	26,513	29,734	12.1%
Operating Expense	Rs m	22,806	24,634	8.0%
Pre-provision Operating Profit	Rs m	13,301	14,499	9.0%
Provisions & Contingencies	Rs m	2,910	1,369	-53.0%
Profit before tax	Rs m	11,867	16,198	36.5%
Tax	Rs m	1,476	3,068	107.8%
Profit after tax	Rs m	10,391	13,130	26.4%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	2.5	2.4
Net profit margin	%	14.6	16.4

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PUNJAB & SIND BANK Balance Sheet Analysis

• The bank's deposits during FY23 stood at Rs 1,096.7 bn as compared to Rs 1,021.4 bn in FY22, thereby witnessing an increase of 7.4%.
• Advances for the year stood at Rs 768.2 bn as compared to Rs 636.3 bn during FY22, a rise of 20.7%.
• Cost of deposits for PUNJAB & SIND BANK rose 4.4% and stood at 4.3%, while yield on advances fell to 7.2%.
• The lender's investments rose to Rs 448.4 bn during the year from Rs 422.8 bn in FY22.
• Borrowing stood at Rs 90.2 bn, a growth of 269.1% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 1,364.5 bn as against Rs 1,210.7 bn during FY22, thereby witnessing a rise of 12.7%.

PUNJAB & SIND BANK Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	140,106	151,085	7.8%
Advances	Rs m	636,266	768,194	20.7%
Deposits	Rs m	1,021,370	1,096,655	7.4%
Yield on advances	%	7.5	7.2
Cost of Deposits	%	4.1	4.3
Investments	Rs m	422,809	448,384	6.0%
Borrowings	Rs m	24,436	90,184	269.1%
Total Assets	Rs m	1,210,675	1,364,545	12.7%

Current Valuations for PUNJAB & SIND BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 1.9, an improvement from the EPS of Rs 1.5 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 31.4, stands at 14.8 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.4 times, while the price to income ratio stands at 2.4 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	10.5	11.8
Earnings per share (Unadj.)	Rs	1.5	1.9
Diluted earnings per share	Rs	1.5	1.9
Avg P/E ratio	Rs	12.2	14.8
Avg P/ABV ratio	Rs	0.7	1.4
Avg Market Cap	Rs	126,406	193,675
Dividends per share (Unadj.)	Rs	0.31	0.48

Ratio Analysis for PUNJAB & SIND BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 70.0x during FY23, from 62.3x during FY22. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 7.86x during FY23, from 7.46x during FY22. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): PUNJAB & SIND BANK's capital adequacy ratio (CAR) was at 17.1% as on 31 March 2023 as compared to 18.5% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 8.7% during FY23, from 7.4% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 0.96% during FY23, from 0.86% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank deteriorated and stood at 9.47% during FY23, from 10.37% during FY22. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. PUNJAB & SIND BANK's gross NPA ratio stood at 7.0% as of 31 March 2023 compared to 12.2% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of PUNJAB & SIND BANK was 1.8% in financial year 2023. This compared with 2.7% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	62.3	70.0
Debt to Equity Ratio	x	7.5	7.9
Loans / Deposits	x	0.0	0.1
Capital Adequacy Ratio	%	18.5	17.1
Return on Equity	%	7.4	8.7
Return on Assets	%	0.9	1.0
Return on Capital Employed	%	10.4	9.5
% of Gross NPAs	%	12.2	7.0
% of Net NPAs	%	2.7	1.8
Yield on Advances	x	7.5	7.2
Yield on Investments	x	5.7	5.5

To see how PUNJAB & SIND BANK has performed over the last 5 years, please visit here.

PUNJAB & SIND BANK Share Price Performance

Over the last one year, PUNJAB & SIND BANK share price has moved up from Rs 13.8 to Rs 31.4, registering a gain of Rs 17.6 or around 128.1%.

Meanwhile, the S&P BSE BANKEX is trading at 49,554.1 (up 0.2%). Over the last one year it has moved up from 38,227.8 to 49,554.1, registering a gain of 11,326.4 points (up 29.6%).

Overall, the S&P BSE SENSEX is up 23.1% over the year.

(To know more, you can check out historical annual results for PUNJAB & SIND BANK here and quarterly results for PUNJAB & SIND BANK here)