PNB Q1 Results: Net profit slumps 49% YoY to ₹1,675 crore on higher tax expenses; asset quality improves
The decline was primarily due to a sharp rise in tax expenses, which jumped to ₹ 5,083 crore from ₹ 2,017 crore a year earlier. While total income grew 15.7% YoY to ₹ 37,231 crore and operating profit rose to ₹ 7,081 crore, the elevated tax outgo weighed heavily on the bottom line.
The net interest income (NII), difference between interest earned and expended, rose 1% YoY to ₹ 10,578 crore from ₹ 10,468 crore in the same period a year-ago and the net interest margin stands at 2.84%.
On the asset quality front, PNB showed significant improvement. Gross Non-Performing Assets (NPAs) dropped to ₹ 42,673 crore, with the Gross NPA ratio improving to 3.78% from 4.98% in the same quarter last year.
Net NPAs also declined to ₹ 4,132 crore, bringing the Net NPA ratio down to 0.38% from 0.60% a year ago. The provisions of the bank came down to ₹ 396 crore from ₹ 792 crore reported in the same quarter of last fiscal year.
Meanwhile, the bank maintained healthy capital adequacy at 17.50% under Basel-III norms, with CET-1 at 12.95%. The overall performance indicates that while tax outgo weighed on profitability, improving asset quality and stable margins provide a positive outlook for future quarters.
The bank's shares closed today's session with a mild loss of 1% at ₹ 108 apiece. However, they have recovered 24% from their February lows after reversing earlier losses in recent months.
The stock has ended the last four months in the green but still trades at a 24% discount from its recent peak of Rs143, recorded in April 2024.
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