Punjab National Bank – Focus On Stronger Balance Sheet: Prabhudas Lilladher | Popgen Tech


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Prabhudas Lilladher report

Our recent interaction with the management of Punjab National Bank suggests that the bank is adjusting with better visibility on stress relief driven by sustained recoveries while underwriting has become tighter.

To avoid further lapses in asset quality, most underwriting is now done centrally and branches only mobilize proposals. Therefore fresh assets acquired since July 2020, have seen significantly low stress levels with non-performing net assets in agriculture of 0.25%, 0.38% in retail and 0.1% corporate.

The guidance is to reduce gross non-performing assets to 9.0-9.5% by March 2023 and increase the supply coverage ratio to 70% from 66% currently.

While the system’s loan growth is strong at 16-17%, the PNB remains conservative and prioritizes the strengthening of the balance sheet which should result in credit growth between 12- 14%

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