 "Ashok Chandra, CEO & MD, Punjab National Bank (PNB)")
Punjab National Bank (PNB), India's second largest state-run lender by assets, aims to recover bad loans worth Rs 17,000 crore ($1.96 billion) this financial year, with about one-third of that expected during the January-to-March quarter, its chief executive officer said.
The New Delhi-based lender expects to recoup these funds from certain large and chunky corporate loan accounts that were written off, Ashok Chandra said in an interview late on Friday, without naming the accounts.
PNB's asset quality has improved over the last two years, after a debilitating corporate bad loan cycle between 2011 and 2019, followed by the hit from the Covid-19 pandemic. It recovered bad loans worth Rs 20,164 crore in 2023-24.
The bank has been setting aside more funds than needed to cushion its balance sheet. Recoveries from written-off and bad loans allow it to reverse those provisions, boosting profitability.
PNB's net profit more than doubled in the December quarter, it reported during market hours on Friday, helped by an improvement in asset quality.
Also Read
Its shares were down 0.2 per cent during a special market session for the federal budget on Saturday. They have fallen 1.6 per cent so far in 2025 against a 3.1 per cent fall in the state-bank index.
Punjab National Bank's gross non-performing asset ratio, a key metric of asset quality, improved to 4.09 per cent at December-end, from 4.48 per cent three months earlier.
While bad loan recoveries were "muted" at Rs 3,400 crore in the December quarter, they should rise to Rs 5,000 crore to rs 6,000 crore in the current quarter, helped by inflows from insolvency proceedings and one-time settlements, the CEO said.
The state-run bank has an outstanding corporate loan book pipeline of Rs 1.15 trillion, but continues to see challenges on loan pricing, he said.
It aims to maintain the net interest margin in a band of 2.9 per cent-3.0 per cent in this fiscal year compared with 3.09 per cent in the December quarter.
India's fiscal year runs April through March.
PNB has raised its loan growth target for this fiscal year to 13 per cent-14 per cent from its earlier expectation of 11 per cent-12 per cent, and that for deposit growth to 12 per cent-13 per cent from 9 per cent-10 per cent, the CEO said.
The bank's loans and deposits grew 14 per cent and 14.4 per cent on-year in the December quarter, higher than most of its peers, largely due to its vast outreach and "aggressive" network, Chandra said.
PNB has more than 10,000 branches across India.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
