Punjab National Bank

#1
Hi Guys,

PNB's result was excellent. Any idea why the stock went down today and didn't go up much yesterday also? Really worried that it isnt moving up even after the result. Has it reached the maximum point already at 751?

Your insights would be of great help. Thanks!!
 

Alchemist

Administrator
Staff member
#2
Are you an investor or a trader?

Yesterday, Punjab National Bank was at a 52-week high (all time high) and saw some profit-booking.

A large part of its profits came from "treasury income".

Sale of investments (equity shares) brought profits of about Rs 70 crore and around Rs 280 crore came from trading gains on government securities.

These may not be there in the long-term - especially if interest rates start moving up again.

I would say the results are good, but not as spectacular as they seem.
 

vasa1

Well-known member
#3
....

Yesterday, Punjab National Bank was at a 52-week high (all time high) and saw some profit-booking.

A large part of its profits came from "treasury income".

Sale of investments (equity shares) brought profits of about Rs 70 crore and around Rs 280 crore came from trading gains on government securities.

These may not be there in the long-term - especially if interest rates start moving up again.

I would say the results are good, but not as spectacular as they seem.
Alchemist, would you agree that your comments apply to many of the banks showing "spectacular" results? It appears that their net interest margins, a key factor before banks became multifaceted, have not improved significantly. In other words, their original function of earning by borrowing and lending isn't that profitable.
 
#4
I am a trader but not intraday. I only lost in Intra day so stopped doing it. Happy to hold stocks for 6 to 12 months.

Do you think any upward swing left in PNB? Or is it going down due to long term concerns that you had referred to?
 

Alchemist

Administrator
Staff member
#5
Alchemist, would you agree that your comments apply to many of the banks showing "spectacular" results? It appears that their net interest margins, a key factor before banks became multifaceted, have not improved significantly. In other words, their original function of earning by borrowing and lending isn't that profitable.
There has been significant improvement in PNB's NII.

I think it is over 20%. I will check later and post about it.

My point is that don't take earnings of banks (especially public sector banks) on face value.

Many of them have reported strong treasury gains because of fall in interest rates.

If the interest rate cycle reverses, these profits may get reduced or even turn into losses.

That is one reason why banks like PNB are trading at single digit PE ratios.

I reiterate, PNB is doing better than many other banks and should give good returns to long-term investors.
 

Alchemist

Administrator
Staff member
#7
Many of the accused of the PNB scam left India in early January.

Billionaire jewellery designer Nirav Modi had left the country on January 1 much before the CBI received a complaint from Punjab National Bank on January 29 about a Rs 280 crore fraud, officials said.

His brother Nishal, a Belgian citizen, also left the country on January 1, while wife Ami, a US citizen, and business partner Mehul Choksi, the Indian promoter of Gitanjali jewellery chain, departed on January 6, the officials said.
https://timesofindia.indiatimes.com...irst-week-of-january/articleshow/62930682.cms

Were they warned in advance and given time to escape?
 

Alchemist

Administrator
Staff member
#8
Government has no choice but to throw more money at PNB now.

If the entire Rs 11400 crore is lost, it would mean a loss of Rs 86 for each citizen of India.

I wonder how many such scams are still hidden!
 

ramkasi

Active member
#9
Government has no choice but to throw more money at PNB now.

If the entire Rs 11400 crore is lost, it would mean a loss of Rs 86 for each citizen of India.

I wonder how many such scams are still hidden!
Hmmmmm... vasaji and magnetji :flybye: remembering the old days

If PNB has to pay all the money, is the new banking act [FRDI Bill] that mr.modi govt. want to introduce [i heard/guess/rumor/maybe] has anything to do with this, like special status/funds to PNB.

Disc: I am just asking , not meant to scare anybody even I don't have clarity, no offense meant.
 

Alchemist

Administrator
Staff member
#11
And would negate Rs. 4300 collected from each tax paying citizen of India. //assuming 2% pay tax.

A Government shouldn't have to act so helpless!
Everybody pays tax in India.

The indirect taxes that most Indians pay are much more than direct taxes that they pay.

Only the high income individuals pay more direct taxes than indirect taxes.
 

Alchemist

Administrator
Staff member
#12
If PNB has to pay all the money, is the new banking act [FRDI Bill] that mr.modi govt. want to introduce [i heard/guess/rumor/maybe] has anything to do with this, like special status/funds to PNB.
FRDI is exactly meant for such situations.

If the bill becomes a law, failing banks like PNB will be able to convert deposits into shares overnight.

The government has assured that FRDI will not be used to rescue PSBs but I don't believe the government.
 

ramkasi

Active member
#13
FRDI is exactly meant for such situations.

PNB will be able to convert deposits into shares overnight.

The government has assured that FRDI will not be used to rescue PSBs but I don't believe the government.
That will be nightmare for pnb depositor.

I wonder how easy to make a fraud and how though to take a loan from PSB for small people :mad:... I still remember standing in large Q's to take my money during demo that too for taking 4000 rs only.:banghead: of my money and running from one bank branch to another ......:mad: :mad:.

ramK
 

Alchemist

Administrator
Staff member
#15
From one of the letters:

"before it becomes too late and the accused flee from the country like Vijay Malaya of Kingfisher group."
If Nostradamus was alive today, even he would have stood up and clapped. :D.
 
#16
There is argument out there that the whistle blower's complaints weren't about Nirav Modi or PNB, fair enough.

But then any sincere investigation towards those complaints must have surely uncovered this PNB fraud.

When all attempts to recover the money failed, Prasad filed two FIRs with the city police. "I then wrote to the state government detailing the scam and how much he owed me. The government transferred the case to the CID, which is still investigating," Prasad said.

"Before I decided to approach the PMO, I had sent emails to the CBI, the Enforcement Directorate and Sebi. But sadly, I received no positive response," he said.
https://www.telegraphindia.com/india/the-prophetic-letter-writer-209018

It can not be that all agencies simply ignored the complaints, at least one of them must have investigated and eventually all would have come to know of it. And for reasons, just kept hush hush and waited for this day.

Feeling minions :hmpf::2in1:
 

Alchemist

Administrator
Staff member
#17
It can not be that all agencies simply ignored the complaints, at least one of them must have investigated and eventually all would have come to know of it. And for reasons, just kept hush hush and waited for this day.
The complaint letters say the details are in the attachments but the attachments are still not available in public domain.

Now it is the moral responsibility of the central government to make public all

1.complaints
2.FIRs
3.communication
4.investigations
5.action taken reports

related to this matter.

RBI says banks have lost more than Rs 61000 crore to fraud in the last five years.

I am sure the actual figure is much higher. Many banks don't even realize that they have been defrauded and simply write-off the loans. This is especially true in PSU banks.

Reserve Bank of India (RBI) data, which a Reuters reporter obtained through a right-to-information request, shows state-run banks have reported 8,670 "loan fraud" cases totalling Rs. 612.6 billion ($9.58 billion) over the last five financial years up to March 31, 2017.
https://www.ndtv.com/india-news/unp...-fraud-problems-extend-far-beyond-pnb-1813569

Now the government wants to re-capitalize the PSU banks so the banks can start lending again.

Once PSU banks start lending generously, they will repeat the same mistakes/frauds and the whole cycle will continue.
 
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