Punjab National Bank (PNB), the country’s second-largest public sector bank, on Friday said it was on track to achieve earlier guided net profit in excess of ₹4,000 crore for this current fiscal. This public sector lender also guided higher credit growth of 8-10 per cent for 2022-23 on the back of improved private investment climate and expected infrastructure boost in the economy.

“We are properly in line with the guidance given to you last July that profits for entire fiscal 2021-22 will be more than ₹4,000 crore”, Ch S S Mallikarjuna Rao, Managing Director & CEO, PNB, said at a press conference. 

In July 2021, PNB top management guided profits of ₹4,000-5,000 crore this fiscal year. Even in 2020-21, PNB had met its profit guidance of over ₹2,000 crore, Rao pointed out.

On Thursday, PNB reported a 96.42 per cent increase in consolidated net profit for the third quarter ended December 31, 2021 at ₹1,151 crore (₹586 crore). For the nine months ended December 31, 2021, PNB recorded net profit of ₹ 3,431 crore ( ₹1,606 crore in the same period in the previous year).

For the fourth quarter of this fiscal, PNB is confident of achieving credit growth of 6-8 per cent, Rao, who will superannuate on January 31, said. In the third quarter, credit growth came in at 2.66 per cent sequentially despite the bank getting recovery of ₹ 4,000 crore from Air India.

“We expect much better credit growth in corporate level in 2022-23 as private investment improves. Budget last year had given impetus to infrastructure and this will lead to good traction in 2022-23. We are confident of doing well in 2022-23”, he said. “Credit growth will drive business profitability. We will not find it difficult to get deposits. We are seeing good traction for credit growth not only in PNB but across banking industry because of the improvement in private sector investments”.

Asked about guidance on asset quality, Rao said that the bank was eyeing the Gross NPA ratio of 12 per cent for the end of March 2022 against the current level of 12.88 per cent as of December 31, 2021. PNB is targeting a net NPA of 4.5 per cent for the end of March 2022 as against the end December level of 4.9 per cent.

On net interest margins, PNB has guided NIM of 2.75-2.8 per cent overall for March 2022. As regards recoveries, Ra said that he expects PNB to make recoveries to the tune of ₹5,000 crore in the current fourth quarter. In the first nine months of this fiscal, overall recoveries stood at ₹17,500 crore, Rao said.

Rao also said that PNB will move forward in selling its non-core assets both on identity real estate as well as some equity investments in associates and subsidiaries. “There is no change in our approach in last one and half years. We have been pursuing liquidation of our non core assets”, he added.

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