Shares of Punjab National Bank (PNB) rose over 4% in opening trade on Friday as investors cheered its second quarter earnings report that topped Street estimates. The public sector bank has clocked record profit in Q2 FY24, which was the highest in the last 14 quarters on the back of higher interest income and improvement in asset quality.

PNB shares opened higher for the second straight session at ₹71.93, up 3% against the previous closing price of ₹69.81 on the BSE. In the first hour of trade so far, the banking heavyweight gained as much as 3.9% to ₹72.55 and the market capitalisation increased to ₹79,820 crore.   

The share price of PNB touched a 52-week high of ₹83.45 on October 3, 2023, and a 52-week low of ₹38.95 on November 3, 2022. In the last six months, the banking stock surged over 43%, while it gained more than 26% in the calendar year. In the past one year, the counter gained nearly 68%.

PNB released its September quarter earnings report post market hours on Thursday, which showed that its net profit zoomed 327% to ₹1,756 crore, compared to ₹411.3 crore in the corresponding period last year. The net interest income (NIIs) – the difference between interest earned and interest expended- grew 20% to ₹9,923 crore in Q2 FY24, as against ₹8,270.7 crore in the year-ago period.

Total income for Q2 FY24 was up 27.7% YoY at ₹29,383 crore, while non interest income stood at ₹3,028 crore, registering a growth of 6.4% on YoY basis.

For the first half of the current fiscal, PNB’s net profit was at ₹3,012 crore, recording growth of 318.3% on YoY basis. Net interest income of the bank for H1FY24 was up 22.8% YoY at ₹19,427 crore, while total income stood at ₹57,962 crore, up 30.9% on annual basis.

On the asset quality front, the gross non-performing assets (GNPA) ratio declined to 6.96% from 10.48% as on September’22. Similarly, the net non-performing assets (NNPA) improved by 233 basis points on YoY basis to 1.47% from 3.80% in Q2FY23. In absolute terms, GNPA was at ₹65,563 crore and NNPA was at ₹13,114 crore as of September 2023.

The provision Coverage Ratio (including two) improved by 795 bps on YoY basis to 91.91% as on September’23 from 83.96% as on September’22, the bank said in its earnings report.

During the quarter under review, savings deposits increased to ₹4,71,238 crore, and current deposits stood at ₹67,038 crore. The core retail advances rose YoY by 16.5% to ₹1,47,247 crore, led by strong growth in personal loan and vehicle loan segments.

Total retail increased by 40.42% YoY basis from ₹1,55,409 crore in Q2FY23 to ₹2,18,230 crore in Q2FY24. Agriculture advances grew 4.49% YoY to ₹1,46,598 crore and MSME advances rose 6.48% YoY to ₹1,38,661 crore in September’23.

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