Q4 Results: PNB posts surprise loss; improves asset quality

Leading public sector bank Punjab National Bank (PNB) posted surprise losses for the March quarter of FY19 owing to higher provisions. The bank's asset quality improved in Q4 and so did the provision coverage ratio.

PNB reported a loss of Rs 4,750 crore for Q4FY19 compared to a loss of Rs. 13,417 crore YoY. The loss was on the back of higher provisions of Rs 7,611 crore.

The bank's net interest income (NII) was at Rs. 4,200 crore in Q4FY19 compared to Rs. 3,063 crore during the same quarter last year, an improvement of 37.1 per cent YoY. Net interest margin (NIM) was at 2.45 per cent in Q4FY19 compared to 1.90 per cent in Q4FY18.

Asset quality improved in the March quarter as its gross non-performing assets (GNPAs) as a percentage of total advances were at 15.50 per cent as against 16.33 per cent QoQ.  Provision coverage ratio was at 74.5 per cent as compared to 68.9 per cent in the December quarter (QoQ). Also, the bank reported increase in fresh slippages at Rs 6,710 crore at the end of March quarter as against Rs. 3,324 crore in December quarter.

For the full year FY2018-19, PNB reported a net loss of Rs. 9,975.49 crore with decline in provisions and improvement in asset quality. The bank had posted net loss of Rs. 12,282.82 crore in FY18, following the exposure of the Rs. 14,000 crore fraud against the bank by diamondaires Nirav Modi and Mehul Choksi.