Interview | PNB to focus on recovery, sees loan growth of 12-13% in FY24, says MD & CEO Atul Kumar Goel

Atul Kumar Goel- PNB

New Delhi-based public sector lender Punjab National Bank (PNB) has embarked on a plan to focus on aggressive loan recovery, improve collections and will be extremely cautious going ahead on monitoring of loans, said Atul Kumar Goel, managing director and chief executive officer.

"PNB has taken a lot of steps to improve the underwriting, as well as the collection efficiency," Goel said in an exclusive chat with Moneycontrol on May 25.
Between July 1, 2020, and March 31, 2023, the bank sanctioned around Rs 5.72 lakh crore of loans, of which around Rs 5.18 lakh crore was disbursed, Goel said.
"This year also the focus will be on recovery. And this year, our target is recovery should be double the addition," the PNB MD added.
The lender’s gross non-performing asset (GNPA) ratio improved by 304 basis points (bps) year-on-year to 8.74 percent as of March 2023 from 11.78 percent in the corresponding month last year.
Total GNPAs for the fourth quarter of the 2023 financial year was Rs 77,328 crore. In comparison, for the same quarter in the previous year, the number was Rs 92,448 crore.
The net non-performing asset (NNPA) ratio improved by 208 bps on an annualised basis to 2.72 percent as of March this year from 4.80 percent in March 2022.
Overall NNPAs for the fourth quarter of FY23 stood at Rs 22,585 crore, versus Rs 34,909 crore a year earlier.
As of March 2023, PNB’s total advances are Rs 8,84,681 crore. Out of the total advances, the corporate book accounts to Rs 3,79,785 crore, registering a 2.56 percent YoY growth.
Goel said in FY24, the bank expects a credit growth of 12-13 percent and has already seen interest from the infrastructure segment.
"Credit growth will be a major focus area in FY24 and we are getting good proposals from road projects. There is some demand for capex (capital expenditure) from the steel as well as the cement industry and demand from the NBFC (non-banking financial company) side also," Goel said.
To put PNB’s credit growth ambition in perspective, India’s largest public sector lender State Bank of India (SBI) has targeted a credit growth of 12-14 percent while Union Bank is aiming for 10-12 percent for the current financial year.
PNB might see some pressure in maintaining the net interest margin or NIM, Goel said. The bank achieved a NIM of 3.24 percent in FY23.
NIM is the profit margin earned from advances and other credit businesses as a percentage of cost.
Additionally, the PNB MD & CEO said that his bank will increase the number of business correspondents (BCs) in the next financial year.
"BCs is a very good product because they are where we cannot reach. As of date, we have employed around 24,000 BCs and definitely we will increase this number in the current financial year," he said.
PNB on May 19 reported a standalone net profit for the March quarter of Rs 1,158.61 crore, up 474.79 percent from Rs 201.57 crore in the same quarter last year. The lender said its net interest income (NII) came in at Rs 9,498.75 crore, a 30.04 percent year-on-year growth from Rs 7,304.13 crore.
NII is the main revenue head for banks and is the difference between interest earned on advances and the interest paid to depositors/funds raised from markets.
PNB’s provision coverage ratio improved by 530 bps on-year in the fourth quarter to 86.90 percent from 81.60 percent.
The bank said its credit cost declined by 73 bps on an annualised basis to 1.72 percent during the quarter.
Global deposits grew 11.77 percent year-on-year to Rs 12,81,163 crore as of March end, while global advances grew 12.68 percent to Rs 8,84,681 crore.
Core retail advances grew 15.21 percent on-year to Rs 1.37 lakh crore as of March 2023.