Punjab National Bank has come out all guns blazing in 2023-24, with a strong financial performance that has had analysts and the banking community sit up and take notice.

Once burdened by bad loans, among other challenges, the country’s second-largest public sector bank has shaken off its sluggishness to become more agile over the past two years.

In the just ended fourth quarter of 2023-24, PNB’s net profit surged 78.11 per cent year-on-year to touch ₹3,100 crore, the highest in 16 quarters. For the entire financial year, its consolidated net profit spiked 171.4 per cent at ₹8,329 crore (₹3,069 crore).

It’s noteworthy that PNB’s net profit in just the fourth quarter of 2023-24 has exceeded that of the entire previous financial year, says Atul Kumar Goel, Managing Director and CEO of the bank.

Also, it’s for the first time that the bank’s quarterly profit has crossed the ₹3,000-crore mark, he adds.

So what’s the bank’s success mantra? 

Goel credits it to the hard work of the bank’s one-plus lakh employees. On prodding some more, he points to the efforts to improve recoveries from non-performing assets (NPA); moreover, the bank’s decision to adopt digital transformation and HR transformation over the last two years has paid huge dividends in 2023-24, he says.

Between March 2023 and March 2024, PNB’s gross NPA (GNPA) declined from ₹77,328 crore to ₹56,343 crore. As a share of advances, GNPA is down to 5.73 per cent from 8.74 per cent. The bank closed fiscal 2023-24 with ₹6,799 crore net NPA, substantially lower than ₹22,585 crore registered a year ago in end-March 2023. As a share of advances, net NPA declined to 0.73 per cent from 2.72 per cent. Credit cost of the bank also fell sharply below 0.7 per cent as the net non-performing loan (NPL) ratio is below 1 per cent. 

Goel says PNB did way better than its projected GNPA of 6 per cent for 2023-24. It now targets 5 per cent GNPA and less than 0.5 per cent net NPA for the current fiscal.

The bank has kept a lid on gross slippages, which have declined steadily over the past few quarters — from ₹6,500 crore in April-June 2022 to ₹4,000 crore in Q4 2022-23, ₹2,400 crore in Q1 2023-24 and ₹2,200 crore in Q4 2023-24.

Underwriting skill 

Yet another reason for the bank’s strong showing is the improvement in the underwriting standard for new loans and the collection efficiency, says Goel.

“Now we have removed the power of the branches. Everything is going to the processing centre,” he says.

From July 2020 to March 2024, PNB has achieved ₹7.87 lakh crore new underwriting (loan sanctioned). As much as ₹7.1 lakh crore has been disbursed and ₹5.53 lakh crore is outstanding, of which slippage (loan-turned-NPA) is ₹1,775 crore, or 0.25 per cent, which is negligible, Goel says.

Slippages vs recovery

Until about three years ago, slippages far exceeded recoveries at PNB. 

Goel says that in 2022-23, the bank worked to ensure recoveries exceeded slippage. “During 2022-23, in every quarter the slippage was less than recovery. In 2023-24 we wanted to improve this further and aimed for recovery that’s double the slippage.”

Thus, slippage fell to ₹5,826 crore in 2023-24 from ₹16,029 crore in 2022-23, while bad loan recovery at ₹22,530 crore was more than thrice the slippage.


On the digital transformation and HR transformation efforts, he says a leading consultant was hired to revamp over 100 products and services. “Now we have data and HR practices to distinguish between performers and non-performers... So this (latest financial performance) is the result of it,” he says.

In 2023-24, PNB invested ₹2,000 crore in technology and targets ₹2,900 crore for the current fiscal.

“We have provided an app for each and every branch (10,000 branches in all),” Goel says. 

When onboarding a new customer, details such as name, date of birth and PAN number are fed into the mobile app, which then links to the bureau site and, within a minute, deciphers the credit worthiness of the customer.

On the best yielding route for recoveries, Goel says it is a mix of several approaches.

“It includes SARFAESI [Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act] action, decree from the DRT [Debts Recovery Tribunal], NCLT [National Company Law Tribunal] route, and OTS [one-time settlement] also. We have all the data available in our system, including where we are the sole banker, where we are the consortium, in how many accounts we have collateral securities, and even where we have liquid security,” Goel explains.

In 2023-24, PNB recovered ₹3,603 crore through NCLT. “Even for the current year, we expect ₹3,200-3,300 crore recovery from the NCLT route,” he says, describing it as the most successful means for big accounts.

Segments in focus 

The retail, agriculture, and micro, small and medium enterprises (MSME) segments currently account for 55 per cent of PNB’s overall loan book. Goel targets 57 per cent this fiscal and up to 60 per cent in two to three years’ time (with the rest coming from the corporate segment).

Given the strong showing so far, he is confident of sustaining the good run this fiscal too.