Published: Wed, May 16, 2018
Markets | By Otis Pena

PNB reports Rs 13416.91 Crore loss in Q4

PNB reports Rs 13416.91 Crore loss in Q4

The bank reported deterioration in gross net performing assets (NPAs) or bad loans, which rose to 18.38 per cent of gross advances at the end of March this year, as against 12.53 per cent a year ago.

In what has been dubbed the largest fraud in Indian banking history, PNB - the second-biggest state-run lender and fourth-biggest overall - disclosed in February that two jewellery groups had defrauded it of more than $2 billion, raising credit overseas from mostly other Indian banks with fake guarantees issued by rogue PNB staff. "After including outstanding amounts under other credit facilities to the above entities, the amount involved now works out to Rs 14,356.84 crore", the bank said in its notes to accounts.

One of country's leading the Punjab National Bank, which was hit by a massive fraud earlier this year on Tuesday reported Rs 13,417 crore loss in the fourth-quarter.

While the bank had reported a Profit after Tax for the year at Rs 1,324.80 crore, RBI, after considering under-reported provisioning, reworked the profit to less than half of it at Rs 532.60 crore.

The remaining provision of Rs 7,178.42 crore will be made during the first three quarters of the ensuing financial year.

PNB's share has dropped from a level of Rs 194 crore in January-end before the scam was revealed to a level of Rs 83.85 on Tuesday end of trade after tanking 6% post the announcement of its quarterly results.

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The statement further said several steps are in the pipeline or have already been initiated by the bank to reduce dependence on human intervention.

It further said that as a prudent measure, the bank has created liability in the books in respect of LoUs/FLCs which are becoming due after March 31 amounting to Rs 6,959.79 crore. Out of this, the much talked about Nirav Modi scam accounted for about Rs 7580 crore, meaning the bank's lending moves left a lot to be desired.

Notwithstanding the infusion of Rs 5400 crore from the government and investment of Rs 5000 crore from qualified institutional investors, the bank's capital capital adequacy ration stood at 9.2% as of March 2018, just about the minimum regulatory requirement of 9%.

The total income for the fourth quarter also declined to Rs 12,945.68 crore from Rs 14,989.33 crore in the year-ago period.

Net NPAs also soared to 11.24 per cent against 7.81 per cent year ago. Its operating expenses rose Rs 5,072 crore in Q4 due to high contribution into the pension schemes as compared to Rs 555 crore a year ago. In the fourth quarter, the bank's gross domestic business grew 7.8 per cent on annual basis over the corresponding period previous year to Rs 10.31 lakh crore, PNB said in a statement.

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