PNB Q3 Results: Stock falls after a sharp rise in provisions, other income aids profit

Shares of Punjab National Bank Ltd. (PNB), the state-run lender, fell from the highs of the day on Monday, January 19, in response to the quarterly results for the October-December period.

Net Interest Income (NII) or core income earned by the lender, stood at ₹10,533 crore, a decline of 4.5% from the same quarter last year, and also a miss on the CNBC-TV18 poll expectation of ₹10,798 crore.

Net profit for the period grew by 13% from the year-ago period to ₹5,100 crore, marginally higher than the CNBC-TV18 poll estimate of ₹4,873 crore. However, the profitability was aided by higher other income, which grew to ₹5,022 crore from ₹3,411 crore.

Asset quality improved marginally on a sequential basis. Gross NPA for the quarter stood at 3.19% from 3.45% from the September quarter, while Net NPAs stood at 0.32% from 0.36% in the previous quarter.

A sharp rise in provisions was also seen during the quarter. Provisions stood at ₹1,150 crore at the end of the December quarter, compared to ₹643 crore during the July-September period.

In its business update shared earlier this month, PNB's global business grew by 9.6% from last year to ₹28.92 lakh crore. Deposits had increased by 8.5% year-on-year to ₹16.6 lakh crore, while Global Credit-Deposit (CD) Ratio stood at 74.21% from 72.58% last year.

Shares of PNB are now trading 4.1% lower after the earnings announcement at ₹126.88. The stock is cooling off from its 52-week high level of ₹135.15, which it had it earlier in the day.