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PNB numbers drop like a stone post Nirav scam

by The Editor
May 16, 2018
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PNB numbers drop like a stone post Nirav scam
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New Delhi: State-run Punjab National Bank posted its highest-ever quarterly loss at Rs 13,416.91 crore in the January-March quarter as it took a massive hit from the Rs 14,000-crore Nirav Modi scam. The Delhi-based lender had reported a standalone profit of Rs 261.90 crore in the January-March period of the corresponding fiscal last year. It ended the FY18 with a net loss of Rs 12,283 crore, against a profit of Rs 1,324.8 crore in the year before.

The bad loans, or non-performing assets (NPAs), for PNB rose to Rs 86,620 crore at the end of March 2018, from Rs 55,370 crore a year ago. Net NPAs also rose to Rs 48,684 crore from Rs 32,702 crore over this period.

In a filing with the stock exchanges, the scam-hit lender has provided for Rs 7,178 crore, or half of the total Rs 14,356 crore loss in the fourth quarter of 2017-18, arising due to the fraud. The rest of the amount will be provided over three quarters of the current fiscal year.

The banks share closed at Rs 86 on the BSE, down 3.8 per cent on a day when Bankex, the banking sector barometer, closed at 29,706.48, down 0.11 per cent.

PNB said it has paid Rs 6,586.11 crore to other banks to discharge its liabilities towards Letter of Undertakings (LoUs) and Foreign Letter of Credits (FLCs) issued fraudulently, and in an unauthorised manner to certain overseas branches of Indian banks through the misuse of SWIFT system of the bank which was then not integrated with CBS.

The gross NPAs rose to 18.38 per cent of gross advances at the end of March this year, as against 12.53 per cent year ago. Net NPAs have also soared to 11.24 per cent, against 7.81 per cent a year ago. The provisions for the bad loans jumped fourfold to Rs 16,203 crore for the quarter under review, compared with Rs 4,910 crore in the same period a year ago.

The banks board had divested two executive directors — KV Brahmaji Rao and Sanjiv Sharan — of all financial and executive powers on Monday. The governments nominee on PNBs board had raised this issue after CBI had named them in a chargesheet filed in the Nirav Modi fraud case.

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

As per the quarterly numbers, the RBI detected 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 1,324.8 crore for entire 2016-17.

Original Article

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