Fraud-hit India's Punjab National Bank records loss of £7.26 billion in Q1

Fraud hit India’s second largest state run bank, Punjab National Bank (PNB) continued with its loss for the second consecutive quarter ended in June for the financial year 2018-19. The bank recorded a net loss of 7.26 billion GBP during April to June period, compared with a profit of 2.65 GBP during the same period last year.

PNB recorded its second biggest quarterly loss after it reported a quarterly loss of 103.64 billion GBP in the last quarter of the financial year 2017-18. The bank reported heavy loss on the back of multi crore fraud cases involving business giants Nirav Modi and Mehul Chowski.

The total revenue of the bank rose to 116.43 billion GBP from 111.76 billion GBP a year ago. Meanwhile, non-performing assets of the bank rose from 18.38 per cent to 18.26 per cent.

PNB is moving ahead with its corrective measures and has looked at the ways to ensure that the systems are strengthened meeting our expectations, said managing director and chief executive officer of PNB Sunil Mehta in a press conference held on Tuesday (7) in New Delhi.

In the first quarter of the financial year 2018-19, the total recovery by the bank stood at 65.24 billion GBP against 56.17 billion GBP recorded in the entire financial year 2017-18, Mehta added.  The company aims to recover 154.49 billion GBP in the first half of the current  financial year. In the first quarter, PNB recovered 24.72 billion GBP through the declaration of the Bhushan Steel Ltd and Electrosteel Steels Ltd insolvency cases.

In an attempt to preserve its capital, PNB aims to monetizing assets from the sale of non-core assets and this has reached 1.29 billion GBP in the first quarter. The bank has also tried to get approval from reserve Bank of India (RBI) and the government for raising money from employees through stock options.

On Bombay Stock Exchange (BSE), PNB shares opened at 1.02 pound and touched an intraday high of 1.03 GBP to close at 0.93 pound, a loss of Rs  8.10% on Tuesday (8).

In February this year, PNB became the victim of India’s biggest ever fraud in which some officers at a single branch of the bank had illegally sanctioned 1.37 GBP fraudulent loan to companies, most of them controlled and managed by billionaire jeweler Nirav Modi. According RBI data, among the government owned banks in India, PNB topped in the list of loan fraud cases reported across India in recent years.