Today, Scam-hit Punjab National Bank announces its first-quarter results as its balance sheets improve due to the inflow of funds due to Bhushan Steel’s acquisition by Tata Steel. In February, Nirav Modi and Mehul Choksi, the jewellers came into the light, involving Rs 14,356 crores scamming. The company’s reputation has been falling down. Even it’s financial also fall out.

4 Key points to look out in its results

1. Profitability:

Provisioning of bad debts, due to tighter loan classification norms by RBI, the bank reported a record. The record mentions the loss ofRs. 13,417 crore in 4th Quarter of the year 2017-18. It also reported the scam-related payouts to other banks as well as the losses in the bond portfolio. The bank is expected to improve upon its performance due to the inflow of funds due to Bhushan Stell’s acquisition by Tata Steel.

2. Capital adequacy ratio:

 In March 2017, the bank’s capital adequacy ratio fell to 9.20% from 11.66 %. More worryingly, the common equity fell below 6% to 5.95% from 7.87%. The bank was also forced to approach the government demanding capital infusion to avoid defaulting on the interest payments due to its additional tier-1 bonds in last months.PNB had received conditional approval from RBI to pay its interest dues on AT-1 bonds, subject to a capital infusion from the government. To improve the capital adequacy ratio, the government has infused the amount of Rs. 2816 crores into the bank as of June end. However, to ensure capital infusion is not vanished out the bank will have to improve its performance.

3. NPAs:

The bank’s gross NPAs rose to 18.38% from 12.53% a year ago and net NPAs were at 11.24% against 7.81% in Q4, of the year 2017-18. Gross NPAs rose to Rs 86,620 crore from Rs 55,370 crore in an absolute number.RBI applied a precondition for the bank could be placed under PCA, If the net NPA is more than 9%. The bank’s NPA ratio could improve in this quarter due to the acquisition of Bhushan Steel reduces the stock of NPAs of the bank.

4. Provisioning:

PNB’s provisions rose nearly three-fold to Rs 20,353 crore from Rs 5,753 crore a year ago in Q4  at the year of 2017-18. Provision for non-performing assets (NPAs) was Rs 16,203 crore, against Rs 4,910 crore a year ago. Provision for depreciation on investment also rose to Rs 626 crore from Rs 208 crore. Due to the spreading of higher gratuity payouts as well as bond losses portfolio over a few quarters. It’s not possible to get a rest to the bank in this quarter. It has also to show scam related payouts to other banks on account of scam. However, it may be able to write back provisions made for Bhushan Steel.

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