Recoveries to be higher, says PNB

Bank says most of the work on recoveries is happening on the field, covering SME and retail sectors

Public sector lender Punjab National Bank expects cash recoveries from its non-performing loans in the second quarter ended September 2016 to be higher than the Rs 4,825 crore it collected from bad loans in the first quarter.

"Cash recoveries from NPAs in Q2 will be better than Q1 of FY17. Most of the work on recoveries is happening on field,  covering small and medium enterprises and retail," PNB managing director and chief executive Usha Ananthasubramanian said.

She declined to elaborate specific targets and performance in the just concluded quarter (Q2FY17) citing "silent period" ahead of announcement of results.

Cash recovery from the NPA accounts in the July-September 2015 (Q2FY16) stood at Rs 1,882 crore, higher than Rs 1,641 crore in July-September 2014.

 

The thrust is on field staff driving recoveries across the branch network in the country. The continuous follow-up is yielding results. 

PNB's gross non-performing assets (NPAs) rose to Rs 56,654.09 crore (13.75 per cent) as on 30 June 2016 from Rs 25,397.42 crore (6.47 per cent) as on 30 June 2015. Provisions and contingencies jumped 51.06 per cent to Rs 2,736.38 crore in Q1 June 2016 over Q1 June 2015.

At time of releasing Q1 results in July, PNB had said it was being working to recover about Rs 3,000 crore from written-off accounts in the current financial year ending March 2017. Bank expects them to bolster bottom-line.

Bank had recovered Rest 727 crore from the written-off accounts in first quarter ended June 2016, up from Rest 217 crore. For the year 2015-16, the recovery from such accounts was Rs 2,297 crore.

The PNB management expects to drive recoveries to a point where they are higher than slippages. The bank's watchlist stands at Rs 3,900 crore.

The momentum is there for recoveries. This trend should set in the coming quarters. No one can say we are done with NPAs but, more or less, the tapering has happened," the MD & CEO said.

Delhi-based lender has created 'War Room' at HO for Real time (T+1) monitoring of NPA, Cash recovery and up-gradation accounts where repayments have resumed and fit regulatory norm for revising status of account.

It has also set up real time digital network from pan-India report in recovery and Committee of General Managers at HO prepares account-wise (outstanding of Rs 100 crore & above) Strategy for Resolution of NPAs.

Referring to its capital adequacy level, MD&CEO said At 11.58 per cent CAR (June 2016) is comfortable level to support rise pace of credit growth in FY17. Its tier I capital adequacy was 8.62 per cent.

It received capital funds to the tune of Rs 2,112 crore from the Government of India on September 14, 2016. It Bank issued and allotted 164.37 million equity shares (of face value of Rs 2 each) to government at a premium of Rs 126.49 i.e. at a price of Rs 128.49 per equity share on preferential basis. The government shareholding at end of June was about 62 per cent.