PNB mulls transferring NPAs worth ₹8,000 cr to bad bank in phases: Goel, MD & CEO | Popgen Tech


Punjab National Bank (PNB), the country’s second largest public sector bank expects overall credit growth of 10 percent in 2022-23 on the back of robust credit demand that seen in the steel, road and cement sectors apart from NBFCs, its MD & CEO. Atul Kumar Goel said on Thursday.

This was well above the six per cent global credit growth seen in 2021-22.

“We see 2022-23 as a very good year for the Indian economy. We have reached pre-pandemic levels of demand”, Goel said after the bank’s Q4 results statement. He emphasized that the scope for PNB to collect treasury income would be almost at all low in the current tax, and therefore the bank is betting big on the growth in business volumes.

Q4 numbers

For the fourth quarter ended March 31, 2022, PNB on Wednesday reported on a standalone basis a net profit of ₹ 202 crore, lower than a net profit of ₹ 586 crore in the same quarter last fiscal . On a pre-tax basis, PNB’s net profit rose to ₹ 3,456 crore (₹ 2,022 crore). After a gap of eight years, PNB is back in the dividend list with a dividend announcement of 32 percent (₹0.64 paisa on par value of ₹2 per share).

Asked whether PNB would be able to sustain the full-year profitability growth recorded in 2021-22 in the current fiscal, Goel said he would prefer not to give any guidance on the bottom line. However, he said PNB is eyeing a 15 percent growth in operating profit, which had come in at ₹ 20,762 crore in 2021-22, during the current fiscal.

Goel said PNB is looking at a net interest margin (NIM) of 3 per cent for 2022-23, up from around 2.79 per cent in 2021-22.

NPA transfer to Bad Bank

Goel said PNB plans to transfer non-performing assets (NPAs) worth ₹ 8,000 crore to the newly created National Asset Reconstruction Company Ltd (NARCL) – commonly referred to as bad banking phases. The first phase will involve transfer of bad loans worth ₹ 2,700 crore by the end of June, he said. The PNB has already made 100 percent provisions for these bad loans, he noted .

He said that the PNB will focus fiscally on the quality of the credit, the improvement in CASA, the recoveries of the NPA and the suppression of slippages. He is optimistic that the PNB will reduce the gross percentage level of the NPA to single digits this fiscal from the existing 11.78 percent.

Non-core assets

Goel said that PNB will divest shares in UTI Asset Management Company and Canara HSBC Oriental Bank of Commerce Life Insurance this fiscal. It will also participate in its rightful issue of housing finance.


Source link