Punjab National Bank (PNB), India’s third- largest lender, surged the most in more than three years after reporting earnings that beat analysts’ estimates.
The shares gained 9.4 percent to 912.10 rupees in Mumbai, the biggest gain since May 18, 2009, making it the best performer on the 236-company FTSE All-World Banks Index. (AWBANKU)
Profit at the state-run lender beat analysts’ forecasts by 13 percent as its asset quality improved. Net soured debt narrowed to 2.56 percent of loans at the end of December, from 2.69 percent on Sept. 30, according to an exchange filing.
“PNB is finally turning the corner in terms of profitability,” said Hatim Broachwala, a Mumbai-based analyst at Karvy Stock Broking Ltd. “Rough patch seems to be over for the bank. Investors are enthused as profits were much better than expected and bad loans fell.”
Net income at the New Delhi-based lender climbed 14 percent to 13.1 billion rupees ($246 million), or 38.49 rupees a share, for the three months ended Dec. 31, from 11.5 billion rupees, or 36.30 rupees, a year earlier, the lender said today. That surpassed the 11.6 billion rupee median of analysts’ estimates compiled by Bloomberg.
The bank’s total outstanding loans increased by 13.2 percent from a year earlier to 2.97 trillion rupees at the end of December. Bank loans in India, excluding advances made to state agencies for food procurement, expanded 15.1 percent in the 12 months to Dec. 28, data compiled by central bank shows.
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