Legacy issues behind us, PNB on track to outperform competition: MD Goel

With legacy issues behind, Punjab National Bank (PNB) is on the right path to outpace the competition and achieve greater heights in terms of profitability during the current fiscal and subsequent years, the bank's managing director Atul Kumar Goel said.

PNB topped the chart recording the highest profit growth of 229 per cent among the 12 public sector banks during the fiscal ended in March 2024. The bank's net profit increased over three-fold to Rs 8,245 crore compared to Rs 2,507 crore in the previous fiscal.

Recalling the position of PNB three years ago, Goel said it was a laggard on many counts with one of the highest gross and net non-performing assets (NPAs) numbers among PSBs and Provision Coverage Ratio (PCR) was low.

"Today you see my net NPA reduced to 0.7 per cent and even the PCR is more than 95 per cent. I am better than my peers," he told PTI in an interview.

Going forward, he said, the net NPA would come down below 0.5 per cent and the net interest margin of around 3 per cent during the current financial year.

"We are on the right path because we have taken a lot of initiatives like improving underwriting, collections, digital and HR transformation.

"Whatever efforts we put in the last two years, results will be visible during this year and subsequent years. Definitely, our profitability would be better than our peers in the coming years," he said.

Talking about the strategy to improve profitability, he said, the focus would be on expanding retail, agriculture, MSME portfolio, extending good corporate loans, controlling slippages and improving recovery.

Besides, he said, the thrust would also be on improving forex income and garnering higher fee income from selling third-party products to augment non-interest income.
 

With regard to improving interest income, he said, the focus would be to increase low-cost deposit CASA (Current Account Savings Account).

CASA as a percentage of total deposits stood at 41.4 per cent at the end of March 2024, he said, the target is to improve beyond 42 per cent by the end of the current fiscal.

The bank intends to keep credit costs below 1 per cent during this financial year.

With all these efforts, he said, the Return on Assets (ROA) is expected to increase to 0.8 per cent during the year and touch 1 per cent by the end of March 2025 translating into a substantial jump in profit.

Asked about anticipated business growth in the current financial year, Goel said, credit growth is expected to be 11-12 per cent while deposit would be 9-10 per cent.

To fund this business growth, the bank has received approval to raise capital of Rs 17,500 crore from Tier I and Tier II bonds and share sale through private placement during the year.

During FY24, the bank had raised Rs 10,000 crore from Tier I and Tier II bonds at a very competitive rate, he added.

With regard to expanding reach, he said, the bank has plans to add another 150 branches to its network in the domestic market and a representative office in Dubai during the current financial year.

Currently, the bank has 10,136 branches in the country and an overseas presence, including in the UK, Bhutan and Nepal.

The bank has a branch in IFSC GIFT City Gandhinagar and is doing good business, he added.