PNB concerned over success of SDR scheme: Jefferies

In our Q3FY16 result review note, we mentioned that the total outstanding 5/25 cases for PNB amount to Rs 10,000 crore. The management clarified that the same is Rs 6,800 crore pertaining to 13 accounts, out of which cases amounting to Rs 30-40 billion have already been classified as NPA. The SDR cases undertaken by the bank amount to Rs 7,000 crore, also in 13 accounts. Out of this, Rs 758 crore has already been classified as NPA, Rs 5,600 crore worth cases have come from the standard restructured book, while the balance Rs 700 crore is from the standard book.

The outstanding security receipts book is Rs 741 crore. The SMA-2 accounts of the bank were in the range of Rs 200-300 billion. Based on these figures, the total net stressed assets (excluding SMA-2) of PNB amount to 16% of the outstanding net advances as of Q3FY16, versus our previous number of 19%.

The management emphatically expressed their concerns on the success of the SDR scheme. They stated that there has not been any successful SDR case till now, and that the entire process of due diligence and negotiations is extremely time consuming.

Punjab National Bank