Wilful defaults by PNB's big borrowers rise further to Rs 15,200 cr by April-end
An erosion of their wealth may not be the only piece of bad news for those who hold Punjab National Bank's (PNB) stock. The 55-percent fall in its price since January has resulted in the bank's market capitalisation falling to less than that of its subsidiary PNB Housing Finance.
According to data available with BSE, PNB’s market cap has fallen to Rs 20,925.15 crore, less than PNB Housing Finance’s Rs 21,322.92 crore. PNB Housing Finance's stock is currently trading around 5 percent lower than the price at which it started the calendar year.
PNB has been at the centre of a Rs 14,000-crore bank fraud involving businessmen Nirav Modi and Mehul Choksi. Poor financial performance on the back of rising non-performing assets (NPAs), and a surge in provisions have also weighed on sentiment.
The bank recently reported a net loss of Rs 13,416.91 crore for the quarter ended March, the highest quarterly loss ever posted by any Indian bank. The bottom line was dragged down by a threefold surge in provisions towards bad loans, because the bank chose to provide for most of its bad loans in the March quarter itself.
The total hit to PNB on account of the Nirav Modi-scam stands at Rs 14,356.84 crore, including unauthorised letters of undertaking and domestic loans. Due to high provisions, the bank's capital adequacy ratio (CAR) dipped to 9.2 percent, which is less than the 11.5 percent prescribed by the Basel-III norms.