scorecardresearchPNB stock trades higher despite bank reporting fraud of over <span class='webrupee'>₹</span>2,000 crore

PNB stock trades higher despite bank reporting fraud of over 2,000 crore

Updated: 16 Mar 2022, 10:57 AM IST
TL;DR.

In 2018, PNB had reported a scam, involving jeweller and designer Nirav Modi and his maternal uncle Mehul Choksi. As per a report, Nirav Modi and Choksi caused losses worth 13,000 crore to the bank.

For the December quarter of the financial year 2022, PNB had reported a two-fold jump in standalone net profit at  <span class='webrupee'>₹</span>1,126.78 crore.

For the December quarter of the financial year 2022, PNB had reported a two-fold jump in standalone net profit at 1,126.78 crore.

State-owned lender Punjab National Bank (PNB) on March 15 reported a borrowing fraud of over 2,000 crore in the non-performing account of IL&FS Tamil Nadu Power Co. Ltd.

"A fraud of 2060.14 Crore is being reported by Bank to RBI in the accounts of the company. The bank has already made provisions amounting to 824.06 crore, as per prescribed prudential norms," PNB said in a regulatory filing post-market hours on March 15. The stock of the company had closed 2.17 percent lower at 36 on BSE on March 15.

However, the announcement by the bank did not have a negative impact on the stock as it rose about a percent in early trade on BSE. Shares of the state-owned bank are now 24 percent down from its 52-week high of 47.60 that it had hit on October 26, 2021.

Meanwhile, a month ago, another public sector lender Punjab & Sind Bank (PSB) had declared a bad asset related to IL&FS Tamil Nadu Power Company, with dues of over 148 crore.

As per a Mint report, IL&FS Tamil Nadu Power Co. was set up as a special purpose vehicle (SPV) by the debt-laden Infrastructure Leasing & Financial Services Ltd (IL&FS) under its energy platform IEDCL for implementation of thermal power projects at Cuddalore in Tamil Nadu.

RBI norms say that lenders must recognise incipient stress in loan accounts, immediately on default, by classifying such assets as special mention accounts (SMA).

In 2018, PNB had reported a scam, involving jeweller and designer Nirav Modi and his maternal uncle Mehul Choksi. As per a report, Nirav Modi and Choksi caused losses worth 13,000 crore to the bank.

Meanwhile, the union government has informed the Supreme Court that 18,000 crore has returned to banks from Vijay Mallya, Nirav Modi, and Mehul Choksi.

For the December quarter of the financial year 2022, the bank had reported a two-fold jump in standalone net profit at 1,126.78 crore. The net interest income, however, saw a 6.1 percent decline on year-on-year basis to 7,803.2 crore against 8,313.2 crore during the same period last year.

Market sentiment on the stock is ‘neutral’, according to a MintGenie poll and an average of 23 analysts has a ‘hold’ call on the stock.

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First Published: 16 Mar 2022, 09:41 AM IST