KR Kamath, chairman and managing director of the bank joins CNBC-TV18 to talk beyond the numbers and the way forward for PNB.
Punjab National Bank recently released its earnings results for the first quarter of the current fiscal. KR Kamath, chairman and managing director of the bank joins CNBC-TV18 to talk beyond the numbers and the way forward for PNB. He says that the projected 20-22% growth in loans at the end of the year is still achievable. NIM is expected to be maintained at 3.5%, he says.
PNB had a meagre write-off of Rs 11 crore this quarter as compared with the Rs 173 crore last year. "Therefore, we are confident of being able to cap NPAs at 2% going forward," he says.
Kamath points out that PNB has not passed on the earlier 25 bps hiks to its customers yet. The final verdict on internal interest hike, if at all the board decides to pass on cost, will be announced tomorrow, after its Asset Liability Committee (ALCO) meet, he said.
Below is the verbatim transcript. Also watch the accompanying video.
Q: How much did you do by way of growth in loans and more importantly what do you expect will be the run rate for the full year?
A: Our credit growth has been 23.4% year-on-year. At the beginning of the year, when the RBI had projected a growth of 18-20% on credit, we normally grow 1-2% above the industry, we had projected a growth rate of 20-22% and we feel this is achievable.
Q: Its commendable that compared to the quarter ago performance of 3.9%, 3.84%is what you have got now. Can you maintain this kind of a margin? Would not volumes and margins get trimmed a bit in the full year?
A: I do agree with you that I had given guidance at the beginning of the year that our effort will be to maintain a net interest margin of 3.5%. Having said that, I would say that my first quarter has helped me to sustain this at 3.5% and I continue my guidance at 3.5%.
For the complete result posted by the bank, read: PNB Q1 net profit up 3.5% at Rs 1,105 cr
Q: Bad loans, they have risen by about Rs 500 crore compared to what you were on March 31. Gross NPLs have gone up by about 10-11%. Is this largely because of moving to the computerized recognition of NPLs? Where the problem areas were and what is the direction of slippages, could they gather momentum because the economy is slowing?
A: I would not say that, that it is attributable for one reason because it has been, I would say well spread. Our incremental delinquency this quarter has been Rs 1177 crore, as against last year
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