PNB

PNB as it is popularly known was not too popular on the Street yesterday after it posted numbers which belied all expectations. For Q2FY15, it posted a net profit at Rs.575, a rise of just 14% when growth was actually expected to be over 100%. NII rose feebly by 3.4% at Rs.4151 crore.  More disappointing was the sharp deterioration in the asset quality. Gross NPA rose from 5.48% to 5.65% (QoQ) while NPA rose from 3.02% to 3.26%.

The only ‘rising’ item was other income, which rose 73% (YoY) at Rs.1558 crore but this was mainly on account of recoveries to the tune of Rs.400 crore from written off loans. Provision coverage was down slightly from 60% to 59.1% (QoQ) while provisions and contingencies jumped up by a huge 91% sequentially. NIMs for the quarter slipped down to 3.42% from 3.18%. Slippage for the quarter was at Rs.3974 crore and of this fresh slippage was at Rs.3565 crore and Rs.408 crore was on account of increase in already slipped accounts. PNB's capital adequacy ratio (Basel-III) came in at 11.79%.