PNB raises asset quality forecast, aims to cut net NPA to 3.5% by March

State-owned Punjab National Bank has raised its asset quality forecast and seeks to reduce net non-performing assets (NPA) to 3.5% by the end of March 2023 from 4.28% as of June 30, 2022 .

The Delhi-based lender had previously planned to reduce net NPA to below 4% by the end of the current financial year.

“…Due to the measures taken by the bank, the net NPA will be permanently reduced to 3.5% by March 2023. I am confident to achieve this figure,” said PNB Managing Director Atul Kumar Goel, after the conference. press conference on the results.

In April-June, the net NPA of GNP fell to 4.28% from 5.84% a year ago and 4.8% in January-March 2022. In absolute terms, the net NPA of banks fell stood at Rs 31,744 crore in June 2022, from Rs 38,581 crore in June 2021.

The lender’s gross NPA fell to 11.27% in April-June from 14.33% a year ago. Gross NPAs, in absolute terms, stood at Rs 90,167 crore in June 2022, compared to Rs 1.04 trillion in June 2021. GNP seeks to bring gross NPAs down to single digits by the end of the year. current exercise, Goel said.

The bank has formed a team of about 300 officials who monitor all NPA accounts, Goel said. It tries to improve bad debt collection and monitors all accounts, including those on which Sarfaesi or NCLT proceedings are pending, he added.

Goel said the bank recovered over Rs 7,000 crore in April-June and expects to recover Rs 8,000-9,000 crore every quarter. He wants to make sure his recoveries are greater than the slippages, he added.

The lender has identified eight accounts worth Rs 2,486 crore which will be transferred to the National Asset Reconstruction Company Ltd (NARCL). All banks should collectively transfer bad debts of Rs 50,000 crore to NARCL, said Goel, who is also chairman of the Indian Banks Association and is leading the rollout of the government-backed asset reconstruction company.

On Friday, the bank reported a 70% drop in net profit to Rs 308.4 crore in April-June. Goel said the decline was caused by lower Treasury earnings due to higher interest rates and market value losses. Treasury profit fell from Rs 1,118 crore in the June 2021 quarter to Rs 573 crore in April-June 2022, Goel said.

In April-June 2022, PNB suffered a hit of Rs 1,409 crore in MTM losses while in the quarter of June 2021, there was a reversal in MTM of around Rs 301 crore, he said. added.

Michael J. Birnbaum