PNB

It is sometimes very difficult to decipher what the market exactly wants. PNB’s asset quality has worsened but the market chose to ignore that and instead look at its 12% (YoY) increase in net profit. It is Quixotic – most of the times, it is asset quality only which matters but here, it has chosen to ignore this and the stock ended in the green.

The second largest PSU bank of India reported a 12% (YoY) rise in net profit for Q1FY18 at Rs.343 crore on a muted 4% increase in NII at Rs.3855 crore.  

Asset quality worsened – Net NPA widened from 7.81% to 8.67% (QoQ) while Gross NPAs too increased from 12.53% to 13.66%.

Provisions and contingencies during the quarter stood at Rs.2609 crore, down 55% sequentially but up from Rs.2284 crore on YoY. The provision coverage ratio stood at 58.23% v/s 58.57% (QoQ).