New Delhi: Creating history of sorts, state-run Punjab National Bank has posted a loss of Rs 5,367 crore for the quarter ending March 2016, making it the biggest ever quarterly posted by an Indian bank in the industry. The development makes PNB the latest entrant to the long list of state-owned lenders reeling under heavy losses on account of mounting bad loans.
With a provision of Rs 10,485 crore made for bad loans, a rise of 173 per cent from Rs 3834.19 crore in the same quarter last year, PNB’s total non-performing assets grew from Rs 34,338 crore to Rs 55,818 crore. Notably, PNB had posted a profit of Rs 306 crore in the same quarter last year.
Also read: Foreign banks not expanding due to India's riskier rating: Raghuram Rajan
Net NPAs or bad loans as a percentage of net advances stood at 8.61 per cent during the last quarter of 2015-16, from 4.06 per cent year ago. Net NPA of the company was at 5.86 per cent in the sequential quarter ended December 2015.
Net interest margins of Punjab National Bank slid 27 per cent to Rs 2767.71 crore in Jan-Mar 2016 period against Rs 3791.58 crore in the same period last year.
PNB now joins the likes of Syndicate Bank which reported a net loss of Rs 2,158.17 for the quarter ending March 2016 due to more than three-fold rise in provisions for bad loans and contingencies. Bank of Baroda, UCO Bank, Central Bank of India, Allahabad Bank and Dena Bank have earlier reported losses due to bad loans.
PNB's results takes the tally of losses of nine out of 18 public sector banks who have declared their March earnings till May 17 to a staggering Rs 14,808 crore.
The downward trend following RBI’s directives to clean up their balance sheets signals serious concerns for the banking industry, analysts say.
