PNB surprised everyone with a very good set of numbers, especially better asset quality and that led to the stock price soar over 10%. India's second largest public lender posted lower NPAs - Gross NPA was down 5 bps at 4.61% (QoQ) and net NPA too came down, it fell by 13 bps at 2.56%.  Its provisioning for bad loans was down also down 15% on YoY and 25% QoQ at Rs.802 crore. Provision coverage ratio of the bank stood at 55.97% compared with 43.8% in Q2FY13 and it was at 50.8% in Q1. Its NII rose 6% (YoY) at Rs.3733 crore and NIM came in at 3.47% v/s 3.5% in Q2FY13.. And all this lower provisioning plus increased income helped the bank end Q3FY13 with a net profit at Rs.1306 crore, up 14% (YoY). The market was also happy that it has announced a cut in its base rate by 25 bps to 10.25% effective from February 9. It is yet to reduce deposit rates and it is also to be noted that SBI reduced rates only by 5 bps to 9.7%.

The bank in a TV interview clarified that it added about Rs 2,473 crore restructured assets in current Q3 and this took the total tally of restructured assets to Rs.30,118 crore. Fresh slippages for the quarter were at Rs 2,968 crore compared to Rs 4,544 crore in Q2. As of now it does not have any more restructuring, Suzlon Energy being the last it did. After two consecutive quarters of disappointing numbers whilst the market was expecting another quarter of poor numbers, PNB surprised all with these numbers. Q4 is another quarter and given the dynamic economic condition, it would be imprudent to assume that there would be no slippages in Q4. So for now, it is best to enjoy the Q3 numbers, and Q4 could be another story.