"Punjab & Sind Bank Q1 Profits Dip by 25% due to Wage Provision and Slippages"

Punjab & Sind Bank Reports 25% Decline in Q1 Profits Amidst Wage Provision and Slippages
Public sector lender Punjab & Sind Bank has faced a challenging start to the financial year 2023-24, with a 25% decrease in net profit for the first quarter. The decline is attributed to provisions made for wage revisions and fresh slippages. However, the bank has seen an increase in total income during this period, as revealed in its regulatory filing.

Profit and Income Figures
During the first quarter of 2023-24, Punjab & Sind Bank's net profit fell to Rs 153 crore, down from Rs 205 crore in the same period the previous year. Despite this decline, the bank's total income rose to Rs 2,494 crore compared to Rs 1,915 crore in the previous year.

Reason for Profit Decline
Punjab & Sind Bank's managing director, Swarup Kumar Saha, explained the reasons behind the drop in profits. The bank had to make a provision of Rs 57 crore for wage revision under negotiation and Rs 450 crore for fresh slippages. Among the new slippages, a mid-corporate account worth Rs 92 crore, operating in the logistics business, contributed significantly to the provision.

Asset Quality Improvement
There was a positive development in the bank's asset quality, with gross non-performing assets (NPAs) decreasing to 6.80% at the end of June 2023, down from 11.34% a year earlier. Similarly, net NPAs declined to 1.95% in June 2023 from 2.56% in the previous year.

Future Goals
Punjab & Sind Bank aims to further improve its asset quality, targeting a gross NPA of 6% and net NPA below 1.5% during the current fiscal year. The provision coverage ratio, which stood at 88.58%, also shows a positive trend compared to the same period last year.

Capital Adequacy and Recovery
The bank's capital adequacy ratio increased to 17.19% at the end of June 2023, up from 16.79% a year ago. Regarding recovery, the bank expects to recover Rs 1,500 crore in the current financial year, having already recovered Rs 345 crore from non-performing assets during the quarter.

Business Growth and Outlook
Looking ahead, Punjab & Sind Bank foresees a credit growth of 13-14% and a deposit mobilization growth of 8-10% in the current fiscal year. The bank's net interest margin (NIM) for the quarter improved to 2.63%, and it aims to maintain an NIM of 2.9% for the entire financial year.
Despite facing challenges in the first quarter of the financial year 2023-24, Punjab & Sind Bank remains optimistic about its growth prospects. The bank's focus on asset quality improvement, recovery, and sustainable business growth strategies should help it navigate the changing economic landscape and continue its mission of serving customers and stakeholders effectively.

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