PNB joined a number of other state-run banks that have reported huge losses on account of rising bad loans. Punjab National Bank's huge loss...
was on account of Rs 10,485 crore provision that the bank made for bad loans.
PNB's total non-performing loans jumped to Rs 55,818 crore in the March quarter against Rs 34,338 crore in the December quarter.
In the previous quarter, Punjab National Bank had set aside Rs 3,776 crore to provide for bad loans, which led to a Q3 loss of Rs 510 crore.
Punjab National Bank would have posted a bigger loss, but for the tax write-back of Rs 1,890 crore in the March quarter.
Experts say the results are a cause of worry for the banking system.
Domestic lenders have seen a surge in NPAs after a cleanup ordered by Reserve Bank of India. The central bank wanted banks to classify some troubled accounts as non-performing and make adequate provisions for those over the December and March quarters.
The bank, however, said its balance sheet clean-up is not complete yet, which means that the lender may continue to struggle with high bad loans for a few more quarters.
Andrew Holland, CEO of Ambit Investment Advisory, tweeted, "Can't say PNB CMD gave me any confidence that it's going to get better for the bank. PNB shares closed 3.3 per cent higher at Rs 76.20 as compared to 0.3 per cent fall in the Nifty following the worst results.
Last week, a string of PSU banks posted poor Q4 results. Bank of Baroda, Uco Bank, Central Bank of India, Allahabad Bank and Dena Bank reported a loss of Rs.3,230.14 crore, Rs.1,715.16 crore, Rs.898.04 crore, Rs.581.13 crore and Rs.326.38 crore, respectively. Union Bank of India posted a sharp fall in profit.