On dismal Q4 results, Punjab National Bank drops 10% and reaches a 52-week low

Punjab National Bank (PNB) shares hit a 52-week low of Rs 29.90 on the BSE on Thursday at 09:32 a.m., frozen at the 10% lower circuit, as the state-owned lender’s standalone net profit fell 66 percent year on year (YoY) to Rs 201 crore in the January-March quarter (Q4FY22) after the bank set aside Rs 325 crore for a fraud. In the same quarter the previous year, the bank made a profit of Rs 586 crore (Q4FY21).

The stock hit a new low for the first time since November 2020. At 09:32 a.m., 43.57 million shares had changed hands on the NSE and BSE, with 1.4 million shares pending sell orders.

The Reserve Bank of India (RBI) had granted PNB discretion to delay the provision of Rs 1,302.41 crore for irregularities reported during the quarter. “During the quarter, a sum of Rs 325.61 crore was charged to the Profit & Loss Account,” the lender stated in an exchange filing.

The lender reported a borrower fraud of Rs 2,060.14 crore in an IL&FS Tamil Nadu Power NPA account in March.

The bank’s net interest income increased by 5% to Rs 7,304 crore in Q3FY21, up from Rs 6,957 crore the previous quarter. Asset quality improved, with gross non-performing assets as a proportion of gross advances falling to 11.78% from 14.12 percent a year earlier. Gross nonperforming assets (NPAs) were 12.88 percent in October-December 2021. Net nonperforming assets (NPAs) decreased to 4.80% from 5.73 percent a year ago and 4.90 percent a quarter ago.