PNB expects to recover ₹ 32K cr of bad loans this FY | Popgen Tech
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Punjab National Bank (PNB) is aiming to recover ₹32,000 crore worth of bad loans this fiscal, according to managing director and chief executive Kumar Goel. The public sector bank is also looking to reduce its net non-performing assets (NPA) ratio as a percentage of total assets to 3.5% by the end of March, from 4.28% at the end of the June quarter .
“It was there ₹7,000 crore of recovery in Q1. During the remaining financial year, there will be a recovery value ₹8,000-9,000 crore during each quarter. There will be more increase than recovery in each quarter,” Goel said at a news conference to discuss the bank’s June quarter earnings.
To meet its loan recovery target, PNB has formed a team of around 300 officers who will be monitoring all NPA accounts. It is trying to enhance bad loan recoveries and is monitoring all accounts including those under Sarfaesi or National Company Law Tribunal (NCLT) proceedings, Goel said.
The bank’s net NPAs fell to 4.28% in the June quarter from 5.84% a year earlier and 4.8% in the March quarter. In absolute terms, net NPAs declined to ₹31,744 crore by the end of June, from 38,581 crore a year earlier. Gross NPAs declined to 11.27% at the end of the June quarter from 14.33% a year ago. Gross NPAs, in absolute terms, stood at ₹90,167 crore as on June 30 compared to ₹1.04 trillion years ago.
PNB is also looking to transfer ₹2,486 crore of bad loans to the National Asset Reconstruction Company Ltd. All banks are expected to transfer costly bad loans ₹50,000 crore to NARCL by September, said Goel, who is also president of the Association of Indian Banks.
In the June quarter, PNB posted a 70% drop in net profit to ₹308 crore due to higher provision for bad loans and impact on exchequer revenue. It incurred a market to mark-to-market (MTM) loss of ₹1,409 crore in Q1, compared to an MTM reversal of approx. ₹301 crore a year ago. While PNB lagged behind its peers in both credit and deposit growth in the quarter, it is targeting credit growth of 10-11% this fiscal, led by assets with retail
Goel also clarified that the bank has no plans to sell a stake in PNB Housing Finance and instead invest ₹500 crore in the housing finance subsidiary’s rights issue to meet regulatory norms. The norms stipulate that PNB must maintain its stake in PNB Housing at more than 26% but less than 30%.
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