Punjab National Bank | Q3FY15 Result Update | Disappointment continues. Negative outlook remains unchanged, rating changed to HOLD from SELL with target price of Rs 173... :: IndiaNivesh

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Punjab National Bank: A big miss; broad trends unchanged ::Kotak Sec, report

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A big miss; broad trends unchanged. 3QFY15 was another disappointing quarter with fresh impairments of 8.6% as slippages remained high, primarily from restructured loans. Earnings grew 3% yoy but with ~95% contribution from treasury. NIM compression and slow growth are accentuating the problem as revenue growth was muted at 7% yoy. Improving macro could be the key driver for re-rating but the high levels of impairment ratio imply that PNB may not be an immediate beneficiary. Retain REDUCE (TP unchanged).

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Hope against hope PNB ::HDFC Sec, report

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Weak quarter; better play on economic revival • PNB :ICICI Securities, report

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Punjab National Bank - Mounting Stressed Assets Rock The Boat; Result Update Q3FY15 :: Edelweiss

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Recommendation SELL PNB, Target Price Rs. 193 :: Kotak Sec, report link

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Punjab National Bank - Core Profitability Muted; Stress Asset Formation Elevated; Result Update Q2FY15 :: Edelweiss, PDF link

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BUY Punjab National Bank : Q2FY15 Update: ICICI Securities, PDF link

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Punjab National Bank (PNB) :: Angel Broking Diwali Top Picks (Diwali Muharat)

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Punjab Nation Bank - Q3FY14 Results Update - Consolidation shaping well :Centrum

Rating: Hold; Target Price: Rs590; CMP: Rs548; Upside: 8%



Consolidation shaping well



We retain HOLD rating on PNB with a target price of Rs590. We believe
consolidation efforts have begun to yield positive results in terms of
growth, asset quality and operating ratios as shown in Q3Y14 results.
While asset quality concerns seem to have eased, we believe it has not
yet peaked as exposure to risky segments, elevated stress and weak
macro indicators may act as spoilsports. This, in addition to higher
employee related expenses, will remain a drag on profitability and
restrict return ratios. The stock trades at 0.6x Dec'15ABV of Rs908,
which leaves limited room for an upside.

$ Q3FY14 results - Operationally strong quarter: PNB's Q3FY14 results,
though on the lower side (to our/ consensus estimates) on the P&L
front, were operationally strong with - a) asset quality showing signs
of improvement b) growth gaining momentum and c) key ratios of NIM and
CASA remaining intact.  NII at Rs42.2bn (+13% yoy) was led by 10% yoy
growth in loan portfolio and 10bps yoy expansion in NIM (reported) to
3.6%. However, led by higher employee expenses and provisioning (NPA
and investment depreciation), PAT at Rs7.5bn, declined 42% yoy.

$ Asset quality concerns ease; but yet to peak: Stress asset addition
for the quarter at Rs36.5bn (4.7% annualised), has declined when
compared to previous periods. We, however, believe that a) exposure to
risky segments* in excess of 35% of total portfolio with higher levels
of NPA/ restructuring therein and b) weak economy will keep NPA/
restructuring levels elevated. Restructured portfolio stood at 9.5%
and problem loans comprised 15% of loans. We continue to factor in
slippages/ credit costs at 320bps/ 120bps respectively over FY14-16E.

$ Retail franchise gearing up well; capital position better:
Realignment of balance sheet franchise towards retail is gaining
traction with a) retail loan growth at +19% yoy outpacing the overall
domestic growth of 10% yoy and 22% incremental yoy domestic growth
being retail in nature and b) share of core deposits at 92%. Total CAR
(including 9m profits) stood at 11.7% and we believe will enable
sustain balance sheet growth for a few more quarters.

$ Valuation and view and key risks: We have revised our earnings lower
by ~3% each for FY14/FY15E and are now factoring in 12%/ 14% CAGR in
NII/ loan portfolio over FY13-16E. The stock has corrected 13% / 15%
in the past 1-month / 3-months and trades at 0.6x Dec'15 ABV of Rs908.
We believe valuations are reasonable due to a) relatively improved
asset quality outlook when compared to peers and b) consolidation
strategy showing favourable results. Reversal in NPA trend will lead
to further de-rating. On the upside, continued reduction in stress
asset addition and improvement in operating metrics will see the stock
re-rate.



Thanks & Regards

--

Technicals: Astrazenca pharma, MRF, Pidilite, Karur Vysya Bank, PNB, Bank of Baroda:: Business Line

Punjab National Bank Ltd. Q1FY14 result:: Microsec Research

Punjab National Bank Ltd. announced its Q1FY14 result on 26^th July 2013.

The Bank’s total income increased by 5.99% QoQ and 7.99% YoY to INR5249.56 crores, driven by 5.80% and 14.90% YoY growth in its Net Interest Income (NII) and Other Income respectively. Whereas, Profit After Tax (PAT) increased by 12.78% QoQ and 2.38% YoY to INR1275.32 crores. The Bank has decreased its provision by 27.83% QoQ to INR1066.48 crores which has pushed up its bottom line.

During the quarter, the Bank's loan book and total deposits expanded by 3.60% and 2.97% YoY to INR305065.56 and INR396828.11 crores respectively. On the asset quality front, the Bank’s asset quality is still the matter of concern. Net NPA and Gross NPA increased by 63 and 57bps QoQ and 130 and 150bps YoY to 2.98% and 4.84% respectively. Moreover, Net Interest Margin (NIM) marginally improved by 1bps QoQ while, decreased by 8bps YoY to 3.52%. The Bank’s Capital Adequacy Ratio (CAR) stood at 12.44% which is 3.44% higher than the regulator’s stipulated norm.

Q1’14 (INR Crores)	Consensus	Actual	Variance %
Total Income	4757.4	5249.56	10.35%
PAT	1203.7	1275.32	5.95%

Punjab National Bank Quarterly-[INR-Crores]
DESCRIPTION	Q1'14	Q4'13	Q1'13	QoQ%	YoY%
Interest Earned	10404.54	10376.63	10553.96	0.27	-1.42
Interest Expended	6497.03	6600.13	6860.83	-1.56	-5.30
NII	3907.51	3776.50	3693.13	3.47	5.80
Other Income	1342.05	1176.21	1168.01	14.10	14.90
Total Income	5249.56	4952.71	4861.14	5.99	7.99
Operating Expenses	2275.76	2101.00	2020.25	8.32	12.65
Operating Profit before Prov.& Cont.	2973.80	2851.71	2840.89	4.28	4.68
Provisions and Contingencies	1066.48	1477.70	1032.49	-27.83	3.29
PBT	1907.32	1374.01	1808.40	38.81	5.47
Tax	632.00	243.21	562.73	159.86	12.31
Profit After Tax	1275.32	1130.80	1245.67	12.78	2.38
Adj Calculated EPS	36.08	32.91	36.73	9.63	-1.77
Advances	305065.56	308725.21	294467.89	-1.19	3.60
Deposits	396828.11	391560.06	385374.73	1.35	2.97
	Q1'14	Q4'13	Q1'13	QoQ (bps)	YoY(bps)
Capital Adequacy Ratio Basel II	12.44%	12.72%	12.57%	-28	-13
% of Net NPAs	2.98%	2.35%	1.68%	63	130
% of Gross NPAs	4.84%	4.27%	3.34%	57	150
NIM %	3.52%	3.51%	3.60%	1	-8
Provisions Coverage%	54.67%	58.83%	62.81%	-416	-814
C/D ratio	76.88%	78.84%	76.41%	-197	47
C/I Ratio	43.35%	42.42%	41.56%	93	179
OI/TI	56.65%	57.58%	58.44%	-93	-179

Regards,

Team Microsec Research

PUNJAB NATIONAL BANK Consolidation on cards; asset quality key monitorable :Edelweiss

We recently met the senior management of Punjab National Bank (PNB).
Management reiterated its focus on consolidating balance sheet growth
given the uncertain business environment, where focus on containing
asset quality will take precedence over growth. The bank believes
challenges on slippages persist(lumpy gems& jewellery account to
elevate Q1 slippages) however; focus on recoveries will offset pressure
from slippages. Deliberate efforts towards conservative growth will help
stabilise asset quality, though current level of stressed pool at 15%
remains a key monitorable (GNPLs of 4.3% + restructured pool of 9.9%).