Aided by robust loan recoveries and treasury gains, Punjab National Bank (PNB) has turned the corner and reported a net profit of ₹306 crore in the April-June quarter this year. Lower cost of deposits too helped boost the bottomline in the June quarter.

Although lower than the net profit of ₹721 crore recorded in the same quarter last fiscal, the latest bottomline performance is a significant improvement over the net loss of ₹3,974 crore recorded in January-March 2016 and signalled that the worst may be over on the asset quality front for this public sector bank.

“The recovery story is the best story for us in the April-June quarter. The good news is that the first quarter has seen recoveries of ₹6,000 crore, of which, cash recovery itself has been ₹4,825 crore,” Usha Ananthasubramanian, Managing Director and Chief Executive Officer, PNB, told newspersons after a board meeting here.

She also said that recoveries in the second quarter had already touched about ₹1,400 crore, which was quite encouraging. In the entire 2015-16, given the efforts at the field level and expected upgrade in some accounts in the coming days, there is hope that the trend of improved bottomline performance should set in during the coming quarters, Ananthasubramanian said. “The momentum is there for recoveries. There is a lot of enthusiasm at the field level to improve recoveries and reduce bad loans,” she added.

For the quarter under review, PNB’s write-back to the profit and loss account on account of recoveries from written-off accounts stood at ₹727 crore. This public sector lender made treasury gains of ₹601 crore in the June quarter.

Total income stood at ₹13,930 crore, higher than the ₹13,276 crore recorded in the January-March quarter.

Asked whether the bank had completed the asset quality review, Ananthasubramanian said that the exercise was completed by March quarter this year, one year ahead of the March 2017 deadline given by the RBI.

For the June quarter, slippages were contained at ₹7,500 crore, much lower than the ₹23,500 crore in the previous quarter. “We may be in control of fresh slippages coming into our books. What is remaining is not cases that could slip,” Ananthasubramanian said.

For the entire fiscal 2016-17, PNB is targeting credit growth of 10-11 per cent, much above the current 4-5 per cent growth.

On capital-raising, PNB is not looking at raising any fresh capital for now except the capital infusion of ₹2,816 crore expected from the Centre.

In the coming days the bank may look to raise Tier II capital through bonds, for which board approval is already available.