Punjab National Bank said about 6 percent of its book maybe eligible for restructuring: Mallikarjuna Rao

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Punjab National Bank (PNB) on August 24 said about 5-6 percent of its credit book may be eligible for restructuring and will get a clearer picture on its recast by end of September.

“With respect to the book what we are looking at, a rough estimate what we are seeing is maybe anything around 5-6% of the credit book (under the present economic scenario) may be eligible under the restructuring profile…It will be clear by September-end and by that time even we would have received clear guidelines from KV Kamath committee as well," managing director and Chief Executive Officer (CEO) SS Mallikarjuna Rao in a post-earnings virtual briefing.

In the same virtual briefing, PNB said its overall credit growth is likely to be at around 4-6 percent in the current fiscal year as it expects the economy to return to normalcy from October onwards. "We still maintain that our overall credit growth would be around 4-6 percent. We are expecting the economy to come back more effectively from October onwards. Though some of the sectors would be impacted, it will take longer period for them (to recover)," PNB managing director and CEO S S Mallikarjuna Rao said at a virtual news conference here.

Rao said tourism, hospitality and aviation are among the sectors that will take longer time to recover or get back on track in view of the changing social behaviour after the COVID-19 outbreak.

However, it is expected that a majority of the economic sectors will return to normalcy by October, he said.

"So as on date, we are not recalculating or reviewing our credit growth anticipation or guidance. We will stick to 4-6 percent. We may look at the position only after October," Rao said.

Earlier in June, PNB had revised its loan growth target to 6 percent for the current fiscal due to the COVID-19 crisis.

Meanwhile, the lender has reported a standalone net profit of Rs 308 crore for the quarter ended June 2020.

PNB had posted a net profit of Rs 1,018.63 crore during the corresponding April-June period of 2019-20.

It, however, clarified that the numbers for the latest quarter were not comparable vis-a-vis a year-ago figures as the peer Oriental Bank of Commerce and United Bank of India were merged into PNB with effective April 1, 2020.

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