
In an interview with PTI, the MD & CEO of Punjab National Bank talked about the bank’s performance and other aspects. Read his interview as given below.
According to the bank’s managing director, Atul Kumar Goel, Punjab National Bank (PNB) has successfully overcome its legacy issues and is now poised to outperform its competitors and achieve greater profitability in the current fiscal year and beyond. PNB emerged as the top performer among 12 public sector banks, recording a remarkable profit growth of 229% during the fiscal year that ended in March 2024. The bank’s net profit increased more than three-fold, reaching Rs 8,245 crore compared to Rs 2,507 crore in the previous fiscal year.
Transformation Efforts Yield Positive Results, Positioning PNB as a Leader
Goel highlighted the significant progress made by PNB in recent years. He pointed out that the bank’s net non-performing assets (NPAs) have been reduced to 0.7%, and the provision coverage ratio (PCR) now stands at over 95%. PNB has successfully improved its underwriting, collections, digital services, and human resources, which has contributed to its enhanced performance. Going forward, the bank aims to further reduce the net NPA below 0.5% and achieve a net interest margin of around 3% in the current financial year. PNB is confident that these initiatives will position the bank as a leader in terms of profitability compared to its peers.
Strategy for Profitability Enhancement
PNB’s strategy for boosting profitability centers around several key areas. The bank plans to expand its retail, agriculture, and MSME portfolios while providing good corporate loans. Efforts to control slippages and improve recovery will also play a crucial role. Additionally, PNB aims to increase forex income and generate higher fee income by offering third-party products. To improve interest income, the bank will focus on increasing its low-cost deposit CASA (Current Account Savings Account). PNB aims to achieve a CASA percentage of total deposits beyond 42% by the end of the current fiscal year. Moreover, the bank intends to keep credit costs below 1% during this financial year.
Anticipated Business Growth and Capital Raising Plans
PNB expects credit growth to range between 11% to 12% in the current financial year, with deposit growth projected to be around 9% to 10%. To fund this business growth, the bank has received approval to raise capital of Rs 17,500 crore through Tier I and Tier II bonds and private placement of shares. In the previous fiscal year, PNB successfully raised Rs 10,000 crore from Tier I and Tier II bonds at a competitive rate.
Expansion Plans and Overseas Presence
PNB has ambitious plans to expand its reach in the domestic market. The bank aims to add 150 branches to its network in the current financial year, in addition to establishing a representative office in Dubai. Currently, PNB operates 10,136 branches across the country and has an international presence in the UK, Bhutan, and Nepal. The bank also has a branch in IFSC GIFT City Gandhinagar, which is performing well.