Punjab National Bank (PNB), the country’s second-largest public sector bank expects an overall credit growth of 10 per cent in 2022-23 on the back of robust credit demand seen in steel, road and cement sectors besides NBFCs, its MD & CEO Atul Kumar Goel said on Thursday.

This was much higher than the six per cent overall credit growth seen in 2021-22. 

“We see 2022-23 as a very good year for the Indian economy. We have reached pre-pandemic demand levels”, Goel said post the declaration of bank’s Q4 results. He highlighted that the scope for PNB to garner treasury incomes would be next to nothing low in the current fiscal, and therefore the bank is betting big on growth in business volumes.

Q4 numbers

For the fourth quarter ended March 31, 2022, PNB on Wednesday reported on a standalone basis a net profit of ₹202 crore, lower than net profit of ₹586 crore in same quarter last fiscal. For the entire fiscal, PNB’s net profit surged to ₹3,456 crore (₹2,022 crore). After a gap of eight years, PNB is back in the dividend list with dividend announcement of 32 per cent (₹0.64 paisa on a face value of ₹2 per share).

Asked whether PNB would be able to sustain the full year profitability growth recorded in 2021-22 in the current fiscal, Goel said he would prefer not to give any guidance on the bottomline front. However, he said that PNB is eyeing a 15 per cent growth in operating profit, which had come in at ₹20,762 crore in 2021-22, during the current fiscal.

Goel said that PNB is eyeing net interest margin ( NIM) of 3 per cent for 2022-23, up from about 2.79 per cent in 2021-22.

NPA transfer to Bad Bank

Goel said that PNB plans to transfer non-performing assets (NPAs) worth ₹8,000 crore to the newly created National Asset Reconstruction Company Ltd (NARCL) — which is commonly referred to as bad bank- in  phases. The first phase will involve transfer of bad loans worth ₹2,700 crore by June end, he said. PNB has already made 100 per cent provisions for these bad loans, he noted.

He said that PNB will this fiscal focus on credit quality, improvement in CASA, NPA recoveries and containment of slippages. He is optimistic of PNB bringing down the gross NPA percentage level to single digit this fiscal from the existing 11.78 per cent.

Non-core assets

Goel said that PNB would shed stakes in UTI Asset Management Company and Canara HSBC Oriental Bank of Commerce Life Insurance this fiscal. It would also participate in its housing finance arm’s right issue.