Punjab National Bank (PNB), the country’s second-largest public sector bank, on Monday reported a 43 per cent decline in consolidated net profit for the third quarter ended December 31, 2022 at ₹ 708 crore (₹1,250 crore).
However, the December-quarter consolidated net profit was higher than the sequential September 2022 quarter net profit of ₹494 crore. The public sector lender recorded a net profit of ₹281.73 crore in the June 2022 quarter.
The bottomline performance for the quarter under review was weighed down by a sharp increase in NPA provisions at ₹3,910 crore (₹3,653 crore).
In the first six months of this fiscal, PNB had reported a consolidated net profit of ₹775.84 crore, down 65.86 per cent over the net profit of ₹2,272.58 crore recorded in the same period last year.
“Going by the performance so far, we should be in a position to close the entire current fiscal with net profit of ₹2,000 crore “, Atul Kumar Goel, Managing Director & CEO, PNB said after a Board meeting on Monday.
For the quarter under review, total consolidated income grew 17.32 per cent to ₹26,134 crore (₹22, 275 crore).
Goel said that bank is aiming for an overall credit growth of 12-13 per cent this fiscal, much higher than 4-5 per cent credit growth recorded last fiscal. In the December 2022 quarter, credit growth was 13.43 per cent, largely driven by robust retail demand.
Focus on RAM
“Our focus on credit growth is RAM (retail, agriculture, MSME). Corporates also there is good demand for credit”, Goel said, adding that RAM now accounts for 54 percent of bank’s loan book while corporates account for 46 per cent.
As regards the net interest margin, the aim is 3 per cent for the entire fiscal, Goel added.
As regards recoveries, Goel said that the bank’s earlier announced aim of overall recoveries of ₹32,000 crore (about ₹8,000 crore every quarter) for the current fiscal stands. After factoring in the recovery performance so far, the bank is now aiming for recovery of ₹10,000 crore in the fourth quarter ended March 2023, he added.
NPAs
Gross non-performing assets (GNPAs) stood at 9.76 per cent of the total loan book, down from 12.88 percent in the year ago period.
Net NPA ratio fell to 3.30 percent from 4.90 per cent. Outstanding NPA stockpile was ₹83,583. 9 crore as of end December 2022, down from ₹97,258.7 crore a year ago. Fresh slippages rose marginally to ₹3,865 crore from ₹3,831 crore a year ago.
On a standalone basis, PNB’s net profit in the third quarter ended December 31, 2022 was down 44 per cent at ₹627 crore (₹1,127 crore).
Deposits grew 7.37 percent, while the share of current and savings account (CASA) deposits increased 43.7 percent of total deposits.
On capital raising front, Goel said that bank would like to raise some AT-1 bonds in the current quarter itself if the rate is as per bank’s choice. “If the rate is not as per our choice, then we will defer the raising. We are now comfortable with capital adequacy of 15 per cent. We may look at AT-1 bond raising of ₹1,500 crore. There is no need for us to look at raising Tier-II capital for now”, Goel added.
He also highlighted that most public sector banks are well placed on capital adequacy front and could if needed easily tap the markets to augment capital.