Punjab National Bank (PNB) has announced a significant increase in its net profit for the September quarter, marking the highest profit in the past 14 quarters. The bank reported a 327% jump in net profit, reaching Rs 1,756.13 crore. This growth can be attributed to higher interest income and improved credit quality. Additionally, PNB’s net interest income saw a growth of about 20% to reach Rs 9,923 crore during the second quarter of the current fiscal year. The operating profit also increased 12% to reach Rs 6,216 crore.
Atul Kumar Goel, the MD & CEO of Punjab National Bank, expressed optimism regarding the bank’s future performance. He stated that credit costs will decrease in the upcoming quarters, leading to an increase in profitability. Goel highlighted that the bank’s net interest income, net profit, and operating profit are at their highest levels in the past 14 quarters.
Goel emphasized that PNB’s focus areas are the retail, agriculture, and MSME sectors. The bank achieved a profitability of over Rs 3,000 crore in the first half of the fiscal year. Goel expressed confidence in maintaining this profitability in the third and fourth quarters. Furthermore, PNB plans to open 100-150 new branches during the current fiscal year.
Addressing concerns about the bank’s retail loan portfolio, Goel stated that there is no stress on this front. The total retail loan portfolio, including vehicle, education, and personal loans, stands at Rs 2.18 lakh crore. Within this portfolio, unsecured loans amount to Rs 25,770 crore, with personal loans accounting for Rs 17,467 crore. In terms of digital transactions, approximately Rs 4,056 crore of the unsecured personal loan is done through digital channels. Goel reassured that the bank conducts regular monitoring of the loan portfolio, including root cause analysis for any signs of sickness or delinquency in personal loans.
The Reserve Bank of India (RBI) Governor, Shaktikanta Das, had previously raised concerns about the rapid growth of personal loans. Goel responded stating that the provisioning requirements of the bank will reduce in the future. During the quarter under review, PNB’s provisioning declined to Rs 3,444 crore, compared to Rs 4,906 crore in the same period last year. Additionally, the bank’s gross non-performing assets (NPAs) as a percentage of total loans decreased from 10.48% to 6.96% at the end of September. PNB aims to further reduce gross NPAs to 6% March 2024, while targeting a net NPA below 1% the end of the fiscal year.
Goel expressed confidence in achieving the fiscal-end target of 12-13% credit growth, citing a 13.8% growth in the first half of the fiscal year. He also mentioned that the bank has the board’s approval to raise Rs 12,000 crore of capital, of which Rs 6,090 crore has already been raised. As a result, there is no immediate requirement for capital raising.
On the stock market, PNB’s shares closed at Rs 69.81 on Thursday, showing a 0.52% increase compared to the previous close on the BSE.