Fraud-hit PNB posts biggest ever quarterly loss of Rs 13,417 cr in Q4; gross NPAs up 18.38%

New Delhi: Scam-hit Punjab National Bank (PNB) on Tuesday posted a loss of Rs 13,416.91 crore for the January-March fourth-quarter period, the biggest ever by any domestic lender, as bad loans surged.

The state-owned bank had reported a standalone profit of Rs 261.90 crore in the fourth-quarter of the preceding fiscal i.e. 2016-17.

With regards to provisions made for the loss incurred on account of the Nirav Modi fraud, the bank said it provided for Rs 7,178 crore, 50 percent of the total amount of Rs 14,356 crore, in the fourth-quarter of 2017-18. The remainder will be covered in the three quarters of the ongoing fiscal year.

A file photo of PNB MD and CEO Sunil Mehta. Reuters.

A file photo of PNB MD and CEO Sunil Mehta. Reuters.

PNB further said it has paid Rs 6,586.11 crore to other banks to discharge its liabilities towards letters of undertakings (LoUs) and foreign letters of credit (FLCs) issued fraudulently and in an unauthorised manner to certain overseas branches of Indian banks via a misuse of the bank's SWIFT system, which was then not integrated with the lender's CBS (core banking solution) system.

Modi and his associates, in connivance with some officials of PNB, have allegedly defrauded the lender of over $2 billion dollar.

Since these two executive directors did not attend Tuesday's board meeting to consider and approve the fourth-quarter financial result, their signatures are not on the annual financial results.

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.

The bank has witnessed a deterioration in gross net performing assets (NPAs) or bad loans, which rose to 18.38 percent of gross advances at the end of March this year, as against 12.53 percent a year ago. Net NPAs were also soared to 11.24 percent against 7.81 percent year ago.

In absolute term, the gross NPA of the bank surged to Rs 86,620 crore in the fourth quarter as compared to Rs 55,370 crore in same quarter a year ago. Similarly, the net NPA also rose to Rs 48,684.29 crore from Rs 32,702 crore at the end of March 2017.

As a result, provisions for the bad loans jumped four-fold to Rs 16,202.82 crore for the quarter under review compared to Rs 4,910.39 crore parked aside in the same period a year ago.

Total provisions other than tax also increased to Rs 20,353.10 crore as against Rs 5,753.51 crore in the same quarter of the previous fiscal.

Even on an operating profit basis, the bank logged a loss of Rs 447.38 crore in the quarter as against a Rs 6,231.79 crore profit in the year-ago period.

As per the quarterly number, the RBI detected a gross NPA divergence of Rs 2,207 crore during FY17. Accordingly, the net profit of the bank was adjusted to Rs 532.6 crore as against declared profit of Rs 1324.8 crore for entire 2016-17.

During the quarter, the government made a capital infusion of Rs 5,473 crore by way of preferential allotment of equity. Consequently the government share holding rose to 62.25 percent on 31 March, 2018 from to 57.04 percent before preferential allotment.

For the full fiscal 2017-18, the bank posted a standalone loss of Rs 12,282.82 crore against a profit of Rs 1,324.80 crore in 2016-17. The total income for the fiscal rose marginally to Rs 56,876.63 crore, up from Rs 56,227.36 crore a year earlier.

On a consolidated basis, the bank booked a loss of Rs 12,130.05 crore as against a profit of Rs 1,187.24 crore in 2016-17, while total income rose to Rs 57,608.19 crore from Rs 57,225.66 crore a year ago.

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Updated Date: May 15, 2018 20:49:12 IST

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