PNB slips 8% as Mumbai branch detects over Rs 11000 cr fraud; investors lose Rs 3000 cr wealth - http://earlyretireonline.com | how to earn money fastFebruary 14, 2018 7:18 am
Categorised in: Breaking Financial News
Punjab National Bank share price slipped 7.8 percent intraday on Wednesday after the bank detected some fraudulent transactions worth more than Rs 11,000 crore in its Mumbai branch.
The fraudulent transaction amount is close to 1/3rd of its total market capitalisation of Rs 36,000 crore and 2.55 percent of total loan book of Rs 4.5 lakh crore (as of December 2017).
With the sharp fall, investors lost nearly Rs 3,000 crore of wealth on single day.
“The bank has detected some fraudulent and unauthorised transactions (messages) in one of its branch in Mumbai for the benefit of a few select account holders with their apparent connivance. Based on these transactions other banks appear to have advanced money to these customers abroad,” the third largest public sector lender said in its BSE filing.
It further said in the bank, these transactions are contingent in nature and liability arising out of these on the bank shall be decided based on the law and genuineness of underlying transactions.
The quantum of transactions is USD 1,771.69 million (approximately).
“The matter was already referred to law enforcement agencies to examine and book the culprits as per law of the land. The bank is committed to clean and transparent banking,” PNB said.
Meanwhile, the bank, on February 6, reported lower than expected earnings for December quarter but asset quality improved sequentially.
Profit growth of 11 percent at Rs 230.11 crore and net interest income growth of 7 percent at Rs 3,989 crore year-on-year were below CNBC-TV18 poll of Rs 558.1 crore and Rs 4,122.9 crore, respectively.
The bank showed a good improvement on asset quality front as gross non-performing assets were lower at 12.11 percent compared to 13.31 percent in previous quarter. Net NPAs were also lower at 7.55 percent from 8.44 percent on sequential basis.
But provisions for bad loans remained at elevated levels, surging 80 percent quarter-on-quarter and 74 percent year-on-year to Rs 4,466.7 crore in Q3.
Provision coverage ratio at 60.78 percent in Q3 improved from 59.20 percent in previous quarter.
At 12:01 hours IST, the stock price was quoting at Rs 149.70, down Rs 11.95, or 7.39 percent on the BSE.
(1 US dollar – 64.15)