Punjab & Sind Bank returns to profit after 8 quarters of losses

Internet NPA nearly halved to 4.04% from as a lot as 8.03% a yr earlier. (File picture)

After eight quarters of losses, state-run Punjab & Sind Financial institution turned the nook within the January-March interval with a web revenue of Rs 161 crore, aided by wholesome restoration. The lender had recorded a web lack of Rs 236 crore in the identical quarter of FY20.

For the complete yr (FY21), the financial institution incurred a web lack of Rs 2,733 cr, in contrast with that of Rs 991 cr in FY20 (pre-pandemic interval). The financial institution’s gross non-performing property eased to 13.76% of its advances as of March 31, 2021 from 14.18% a yr in the past.

Internet NPA nearly halved to 4.04% from as a lot as 8.03% a yr earlier.

Nevertheless, sequentially, whereas GNPAs grew from 13.14% as of December 2020, web NPA, too, jumped from 2.84%. However the rise in gross unhealthy loans was the fallout of the Supreme Court docket lately vacating an earlier order that had directed lenders to not classify an account (till additional order) as NPA if it was not so till August 31, 2020. So, the collected NPAs in earlier months needed to be declared as a part of the March quarter financials.

Having offered for 83% of its unhealthy loans, the financial institution now expects to publish revenue in every quarter of this fiscal, managing director and chief government S Krishnan mentioned, indicating the worst is over for the financial institution. Its provision protection ratio (PCR) improved considerably over the previous yr from nearly 67% in March 2020.

Capital-to-Danger (Weighted) Belongings ratio, too, jumped to 17.06% in March 2021 from 12.76% a yr earlier, because of the federal government’s infusion of as a lot as Rs 5,500 crore. CASA (present account, financial savings account) degree, which displays the financial institution’s skill to garner low-cost funds, jumped nearly 19% from a yr earlier. Nevertheless, web curiosity margin dropped to 1.7% within the March quarter from 1.87% a yr earlier than.

Krishnan mentioned the price of the waiver of compound curiosity for all debtors who availed of a mortgage moratorium within the wake of the pandemic (in sync with a current Supreme Court docket directive) could possibly be about Rs 30 crore for his financial institution. Requested if the lender is urging the federal government to compensate it for this waiver, he mentioned the Indian Banks’ Affiliation was taking over the matter on behalf of all banks with the Centre.

Refuting speculations, Krishnan mentioned he hasn’t acquired any communication from the central financial institution expressing concern about non-interest paying securities (to the tune of Rs 5,500 crore) that the federal government used late final fiscal to recapitalise Punjab & Sind Financial institution.

Punjab & Sind Financial institution, Krishnan mentioned, received’t contribute to the fairness of the proposed “unhealthy financial institution” (Nationwide Asset Reconstruction Firm), which is predicted to be operational in June. Nevertheless, the financial institution will take into account transferring sure unhealthy loans to it.