Punjab National Bank (PNB), India’s second-largest public sector lender, on Tuesday reported a loss for the second consecutive quarter. After posting its largest-ever loss of Rs 13,417 crore in January-March, the bank reported a loss of Rs 940 crore for the April-June period.

A Reuters poll of analysts had estimated a loss of Rs 2,418 crore. Despite a smaller-than-expected loss, PNB’s stock took a beating after it announced its Q1 results, falling more than 7% on the BSE in the second half of the day.

The bank’s net interest income for the quarter came in at Rs 4,692 crore, a 22% rise from Rs 3,855 crore in the corresponding period last year.

Provisions for bad loans or non-performing assets (NPAs) stood at Rs 4,982 crore, up nearly 95% from Rs 2,560 crore last year. However, sequentially, provisions saw a sharp fall as the figure reported in the last quarter—Rs 16,203 crore—was more than three times the figure reported in Q1.

The bank said provisions for the 27 borrower accounts under the insolvency process stood at Rs 321 crore for Q1, with the total provisions for these accounts at Rs 10,672 crore.

During the previous quarter, the bank had been hit by a fraud at its Brady House branch in Mumbai. In February, PNB had informed the exchanges that gems and jewellery companies related to Nirav Modi and Mehul Choksi had reportedly obtained fraudulent letters of undertaking (LoUs)—under which a bank allows its customer to raise money from another Indian bank’s foreign branch in the form of a short-term credit—to avail the facility overseas.

PNB had set aside 50% of the provisions against the fraud, or Rs 7,178.42 crore, in the previous quarter. During Q1, the bank said it made further provisions of Rs 1,863 crore and would set aside the balance amount in the next two quarters.

Provisioning coverage ratio—which indicates the funds a bank has set aside to cover losses from loans—was 61.8% as on June 30, up from 58.42% as on March 31.

On the asset quality front, the bank saw it deteriorate compared to the corresponding period last year, but a slight improvement compared to the January-March period. Gross NPAs rose around 44% from Rs 57,721 crore last year to Rs 82,889 crore this year, but fell 4.3% from Rs 86,620 crore in the previous quarter.

Gross NPA ratio, too, increased from 13.66% last year to 18.26% this year, but improved slightly when compared to last quarter’s figure of 18.38%.

Net NPA ratio too improved on a sequential basis, down from 11.24% in the last quarter to 10.58% now.

PNB’s stock closed at Rs 82.95 per share on Tuesday, down nearly 8% from the previous day’s close.

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