PNB

The second largest PSU bank after SBI, spiked up on the bourses on Friday despite a 42% drop in net profit for Q3FY14 at Rs.755 crore. This was on the back of its improvement in asset quality, which indicates how the market is today more bothered about NPAs than bottomlines. PNB’s Gross NPA declined 18 bps (QoQ) and though up 35 bps (YoY) at 4.96%. Net NPAs was also down, 27 bps (QoQ) and up 51 bps at 2.8%.

Net profit was dented mainly on account of higher provisions, rising 98% (YoY) at Rs.1590 crore. On the other hand, provisions and contingencies fell 16.25% (QoQ) though provision coverage has gone up to  58.55% from 55.27% in Q2 and 54.67% during previous Q3. The Bank has stated an amount of Rs 166.18 crore was charged to P&L account during the Q3 towards the amortisation relating to enhancement in gratuity limit and re-opening of pension option for existing employees. Unamortised liability carried forward Rs 830.91 crore shall be charged proportionately in accordance with the said RBI guidelines. PNB’s CAR as per Basel III norms was at 11.02% v/s 11.62% (QoQ).