However, if it was not for a tax write-back, Punjab National Bank's loss would have been even higher at Rs 7,300 crore.
Bogged down by a pile of bad loans given to companies, Punjab National Bank (PNB) on Wednesday reported the highest quarterly loss by any public sector bank so far at Rs 5,367 crore for the fourth quarter ended March 31.
The bank had reported a profit of Rs 306.56 crore in the corresponding period of the last financial year. If it was not for a tax write-back, the loss would have been even higher at Rs 7,300 crore.
The bank undertook a three-fold surge in provisioning for bad loans, including for power discoms and Punjab foodgrain related loans, were the main drags on the bank's performance and it expects the pain to continue for some more time.
Surprisingly, the stock closed 3.25% up at Rs 76.20 on the BSE.
"We have completed our Asset Quality Review (AQR). The bank provided Rs 11,380 crore for bad loans during the quarter including Rs 385 crore for discoms," PNB managing director Usha Ananthasubramanian said. Besides, the bank has made provision of Rs 167 crore for losses on Punjab foodgrain related loans, she said.
The gross non-performing assets (NPAs) of the bank jumped to Rs 55,818 crore from the year-ago period, which is 12.9% of its assets, higher than the 6.55% the bank reported a year ago.
Ananthasubramanian said the pain would continue for some more time given the economic situation. However, the bank saw its operating profit rise to Rs 3,228 crore, from Rs 3,203 crore in the year-ago quarter.
Parag Jariwala of Religare Capital Markets, said, "PNB reported a PBT loss on account of a sharp rise in provisions, however a tax write-back narrowed the loss to Rs 5,400 crore. The bank provided Rs 170 crore towards its Rs 2,200 crore exposure to Punjab government for food credit and will provide a similar amount in the first quarter of the financial year."
Interest income also fell to Rs 10,824 crore, from Rs 11,651 crore in the fourth quarter of 2014-15. The net interest income fell to Rs 2,768 crore from Rs 3,792 crore. On full year basis, the bank reported a loss of Rs 3,974 crore for 2015-16, as against a profit of Rs 3,062 crore in the previous fiscal. However, full-year total income rose to Rs 54,301 crore, from Rs 52,206.09 crore in 2014-15
Rahul Shah, vice president - equity advisory group, Motilal Oswal Securities, said the bank suffered a record loss on account of higher NPAs. "They have done AQRs fully for which they have provided Rs 11,380 crore as bad loans. This includes provisions for Punjab food grains, and power discoms."
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