‘PNB sees double-digit credit growth this fiscal’ | Popgen Tech


NEW DELHI : In addition to the challenges of the last two pandemic years, the Punjab National Bank (PNB) also had to face the merger of two state-run banks. Still, the public sector lender turned a profit, maintained its CASA share, and also improved its capital adequacy and asset quality, managing director and CEO Atul Kumar said. Goel in an email interview. Edited excerpts.

How has the bank performed so far, and what is the outlook for the current fiscal year?

The last two years have been challenging, with the pandemic affecting all economic sectors and the merger leaving a long-term impact on us. Under such circumstances, we did well. We strengthened our procedures, created verticals for better operational efficiencies, worked on our underwriting standards and were able to bring in more equity through the markets. While we remain cautiously optimistic for this financial year—cautiously because we will face challenges as the global economy faces headwinds—our focus this year will be on quality growth with profitability. In the first quarter of this financial year, we were able to share 8 trillion in global advances, which grew by 10% year on year. Our NPAs have come down sequentially and annually. NIM improved by five basis points to 2.79% in Q1 FY2023.

I hope the next quarters will be better. The outlook for credit demand is positive, with several factors driving this increase. Strong economic growth, revival in the corporate segment, support schemes for the MSME segment, and stronger consumer sentiments will all help double-digit credit growth. We are forecasting 11%-12% growth in our advances.

Which segments are driving credit growth, and how does the bank plan to finance the requirements for growing segments?

In my opinion, credit growth will be strengthened by economic growth, increase in government and private capex, extension of the production linked incentive scheme (PLI) and various other schemes for the MSME. The infrastructure sector will get the necessary boost through various government reform measures under the 145 trillion and more National Infrastructure Pipeline and PM Gati Shakti. The retail sector will grow with better consumer demand. With climate emerging as a challenge, the focus is now on developing cleaner and greener economies, and we expect renewable energy to be another sector with great potential. CASA (current and savings accounts) low cost deposit has been our forte. We have increased our deposit rates along with the economic scenario and have also come up with various new drives and schemes to improve our deposit base.

What is the bank’s focus for the next few years?

Our medium and long term strategy focuses on the three pillars of asset quality, accelerating growth and improving profitability. Better customer experience and transformation operations will be the main enablers to support the above objectives. For asset quality, we plan to increase the use of call centers as a key channel to drive collections.

We also intend to leverage digital tools to improve ease of payment and digitize recovery processes. Growth will be accelerated by focused growth in the RAM (Retail, Agriculture and· MSME) segment and digitization of customer onboarding and loans. Profitability will improve by improving fee-based income and wealth management offerings and through cost rationalization. We are also investing in an omnichannel customer experience platform. We are working to launch our super-app solution through our mobile application, PNB One, where not only the banking products and services but also the lifestyle services and options of the market will be available.

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