Pnb shares hit 52-week low as new bad loans double in size

Shares of National Bank of Punjab plunged on Thursday after the public lender’s quarterly performance fell well below Street estimates.

GNP shares fell 10% to a 52-week low of 29.5 rupees each on BSE in the opening minutes of the trade itself.

Punjab National Bank’s net profit fell 65.5% on an annual basis to Rs 201.6 crore, according to a regulatory filing. Its net interest income – or the difference between interest earned and interest paid – rose 5% year on year to Rs 7,304.1 crore for the three month period, but did not meet the expectations,

GNP slippages soared 110.8% sequentially to Rs 10,506 crore, and write-offs tripled in the October-December period.

However, its asset quality improved, with its gross non-performing assets (NPA) as a percentage of total loans down 110 basis points to 11.78% from the previous quarter.

PNB continued to increase its provisions for bad debts and contingencies. Its provisions increased by 44.7% sequentially to Rs 4,851.5 crore.

PNB has canceled NPAs where provisions are at 100%, Managing Director and CEO Atul Kumar Goel told CNBC-TV18. to the current quarter number,” he said.

The bank expects credit growth of 10% in the year ending March 2023 with 15% growth in retail.ector, he said.

Goel also said that the corporate sector is seeing good demand from the infrastructure segment.

The board of PNB has announced a final dividend of 64 paise per share for the financial year ending March 2022.

Morgan Stanley maintained an “equal weight” rating on PNB with a target price of Rs 41 each. Despite a big hit on the cost front, PNB’s profit is 81% lower than the brokerage’s estimate.

The brokerage’s target implies a 23.9% rise in the stock from Wednesday’s closing price.

First post: STI

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