Punjab National Bank has announced its losses at the end of the September quarter as Rs. 4,532 crores, owing to increases in provisioning for non-performing assets (NPAs). In a filing with the stock exchange, the bank declared that this figure had been arrived at by looking at its various products, as well as the outstanding debt, saying, “The financial results of the bank have been arrived at after considering provisions for non-performing assets, standard assets, restructured advances, standard derivative exposures and investment depreciation on the basis of extant guidelines issued by RBI.”
It appeared that the bank had made a direct reference to the Nirav Modi scam that saw the bank defrauded of an enormous sum of Rs. 14,357 crores, which a statement from the bank referenced indirectly thusly, “The bank had made provisions amounting to Rs 9,041.88 crore up to June 30. Further, the bank has made provision of Rs 3,295.12 crore during the September quarter. The remaining provision will be made during the next quarter of the current financial year as per terms of RBI’s dispensation.”
There was some improvement from the same quarter in comparison to last year, with the percent of gross NPAs dropped from 18.26% in Q1 to 17.16% in Q2, being considerably higher than 13.31% last year. Looking at the monetary values, however, seemed to indicate a different story as a Q2 figure of Rs. 7,733 crores was much larger than Rs. 4,982 crores in Q1, which was far in excess of Rs. 2,964 crores from last year. This was due to the increased provisioning that the bank had referred to in its filing.