Delhi-headquartered lender Punjab & Sind Bank reported a net profit of Rs 174 crore for the first quarter ended June 30, aided by higher non-interest income.

Reduced NPAs and contingencies also helped the bank to post positive Q1 numbers.

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The State-owned lender had registered a net loss of Rs 117 crore a year ago. Sequentially, it had registered a net profit of Rs 174 crore as of the April-June 2021 quarter.

“The bank has consistently improved the performance over the last few quarters. The net profit also shows that the bank has turned around its performance against the last quarter.

“As far as profits are concerned, my net interest income has gone up, operating income has gone up and the cost to income ratio has gone down,” Punjab & Sind Bank MD and CEO K Krishnan told reporters in a post-results conference held virtually.

The total income of the bank during Q1FY22 rose to Rs 2,039.61 crore from Rs 1,954.39 crore in Q1FY21.Its non-interest income jumped 127 per cent to Rs 349 crore and operating profit grew 82 per cent to Rs 411 crore.

The net interest income was up by nearly 8 per cent to Rs 579 crore. While the cost to income ratio improved to 55.73 per cent as against 67.33 per cent in June 2020 and 78.94 per cent in March 2021.

Provisions for bad loans and contingencies for the quarter fell to Rs 77.30 crore from Rs 382.56 crore in the year-ago quarter.

Krishnan said the bank’s recovery and upgradation improved. “Our slippages during the quarter were of around Rs 440 crore, against which the cash recovery and the upgradation alone is around Rs 700 crore.”

The bank’s asset quality showed an improvement and the gross non-performing assets (NPAs or bad loans) came down to 13.33 per cent of the gross advances as of June 30, 2021, against 14.34 per cent a year ago.

In absolute value, the net NPAs stood at Rs 9,054.96 crore, up from Rs 8,848.06 crore. The net NPAs ratio fell to 3.61 per cent (Rs 2,206.70 crore), from 7.57 per cent (Rs 4,326.41 crore).

On being asked about still high NPAs at the gross level, Krishnan said the bank has not made any write off, which is permitted by the RBI and can be done as per the standard accounting method.

“I have sufficient headroom to do that, if I do that my gross NPAs will come down,” he added.

The bank said it has kept the account of Delhi Airport Metro Express Pvt Ltd (DAMEPL) as standard, in accordance with the Supreme Court order and RBI guidelines.

The bank has not treated an outstanding of Rs 166.63 crore towards DAMEPL as NPA, it said. It has held the provisions of Rs 92.24 crore against this, higher than the required Rs 49.59 crore.

The provision coverage ratio of the bank stood at 84.22 per cent as of June 30, 2021, and the liquidity coverage ratio at 215.52 per cent.

On the retail business, specifically on home loans, the lender said it is offering one of the cheapest rates available in the market. Besides, the bank has created various retail hubs in different parts of the country to sell retail products.

“We will also set up dedicated marketing verticals to approach customers,” Krishnan said. The bank’s total business as of June 30, 2021, grew by over 13 per cent to Rs 1.66 lakh crore.

The deposits were up by 15.6 per cent to Rs 98,478 crore, while advances grew by 10.13 per cent to Rs 67,933 crore. Whereas the corporate advances constituted 55 per cent of the advances, RAM (retail, agriculture and MSME) formed 44 per cent.

Shares of the bank closed 1.48 per cent up at Rs 20 apiece on BSE and NSE.