PNB posted a whopping net loss of Rs 5,367 crore in the January-March quarter compared with a profit of Rs 307 crore in the year earlier. Provisions shot up to Rs 11,380 crore from Rs 3,281 crore following a surge in gross non-performing assets (NPAs) to Rs 55,818 crore fromRs 25,695 crore at the end of March 2015.
Punjab National Bank’s asset quality worsened as gross non-performing assets shot up to 12.90 per cent of gross advances during the quarter, from 6.55 per cent in the year-ago period.
A number of Indian banks are being forced to clean up their books under an asset quality review (AQR) initiated by the banking regulator– Reserve Bank of India (RBI). Five other state-run lenders have also reported steep losses in the just-concluded fourth quarter of FY16.
Investors, however, seemed to take heart from the numbers, indicating optimism that the worst may be over for the country’s second-biggest state run lender. The PNB stock ended 3.25 per cent higher at Rs 76.20 on the Bombay Stock Exchange (BSE) on a day when the Sensex was little changed.