Fraud-hit PNB posts biggest quarterly loss of Rs 13,417 crore in 4th quarter

Source: The Hitavada      Date: 16 May 2018 12:01:19


 

NEW DELHI

THE scam-hit Punjab National Bank (PNB) on Tuesday posted a loss of Rs 13,416.91 crore for the January-March 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 2016-17. With regards to provision made for the loss incurred on account of Nirav Modi fraud, the bank said it provided for Rs 7,178 crore, 50 per cent of the total amount of Rs 14,356 crore in the fourth quarter of 2017-18. The remaining amount will be covered in the three quarters of the current fiscal year.


PNB further said it had 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 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 (core banking solutions).Modi and his associates in connivance with some officials of PNB defrauded the bank of over USD 2 billion dollars.Yesterday, the bank board, following Government diktat, had divested two executive directors -- K V Brahmaji Rao and Sanjiv Sharan -- of all financial and executive powers. The action came after CBI named them in a chargesheet filed in the Nirav Modi fraud case.


Since these two executive directors did not attend today’s board meeting to consider and approve the fourth quarter financial result, so 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 deterioration in gross net performing assets (NPAs) or bad loans, which rose to 18.38 per cent of gross advances at the end of March this year, as against 12.53 per cent a year ago. Net NPAs also soared to 11.24 per cent against 7.81 per cent 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. In the fourth quarter, gross domestic business grew 7.8 per cent on annual basis over the corresponding period last year to Rs 10.31 lakh crore.