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Nirmal Bang Report
Punjab National Bank reported overall weak earnings growth (YoY) due to soft margin expansion, ~35% YoY decline in non-interest revenue and 3.5% YoY increase in provisions (ageing plus slippages).
The stock of gross non-performing asset declined QoQ, mainly led by large write-offs. Recoveries/upgrades seemed weak vis-a-vis elevated slippages.
At a time when most banks have reported improvement, PNB’s credit cost seems to have deteriorated, affecting earnings.
Loan growth was lower than industry rate, held back by low capital ratio, coupled with aggression from private banks.
Sequentially, PNB saw higher growth in the corporate portfolio, likely indicating an upturn in the corporate credit cycle going forward.
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