Punjab National Bank (PNB) has posted 7.12 per cent increase in net profit at Rs 246.51 crore for its third quarter ended December 31, 2018, and has brought down its Gross NPA from 18.32% to 16.33% indicating a sharp drop in provisions for bad loans. This despite the 100% provision made for the Rs 13,000 crore scam in which Nirav Modi is the prime accused.
According to the reports, Punjab National Bank, the second largest government-owned lender has reported a surprise profit in the October-December quarter, aided by lower provisioning for bad loans. PNB recovered about Rs 16,000 crore in the quarter helping the bank improve its balance sheet.
The provisions decreased 67 per cent from Rs 7,733.27 crore in the previous quarter to Rs 2,565.77 crore in the current quarter. During the quarter, the percentage of net non-performing assets declined to 8.22 per cent from 8.90 per cent in the September quarter.
“We are back in (the) black, after 100 per cent provisions for all our commitments,” PNB chief executive Sunil Mehta said in an earnings briefing. “We have honoured all our commitments. Our bank, as on date, has provided all for that incident (Nirav Modi fraud). We suffered because of the one-off incident which has now been absorbed by the bank,” Mehta said.
The total provisions excluding for income tax, made during the third quarter of the current financial year were ₹2,753.84 crore as against ₹4,466.68 crore in the year-ago period.