Punjab National Bank (PNB) on Saturday reported its highest-ever quarterly standalone profit at Rs 3,252 crore in April-June FY25 helped by a decline in bad loans and an improvement in interest income.
The state-owned bank posted a net profit of Rs 1,255 crore in the June quarter of FY24. This is the highest ever quarterly profit recorded by the bank on account of improvement in various parameters, including net interest income, recovery and CASA, Managing Director Atul Kumar Goel said.
Total income in the quarter rose to Rs 32,166 crore from Rs 28,579 crore in the same period a year ago. The lender’s interest income also increased to Rs 28,556 crore from Rs 25,145 crore in the same quarter a year ago, as per a regulatory filing.
Net Interest Income (NII) increased to Rs 10,476 crore in Q1 FY25 from Rs 9,504 crore earlier, showing an improvement of 10.23 per cent. Gross Non-Performing Assets (NPAs) declined to 4.98 per cent of gross advances by June 2024 from 7.73 per cent in the same quarter a year ago.
Similarly, net NPAs declined to 0.60 per cent from 1.98 per cent. As a result, provisions for bad loans came down drastically to Rs 792 crore in April-June FY25 as against Rs 4,374 crore in the year-ago period.
Provision Coverage Ratio improved to 95.9 per cent as of June 2024 from 89.83 per cent a year ago.
On a consolidated basis, the bank reported a net profit of Rs 3,976 crore in the quarter under review as against Rs 1,342 crore a year ago. The consolidated financial result of the bank comprises five subsidiaries and 15 associates.
The capital adequacy ratio of the bank improved to 15.79 per cent at the end of June 2024 compared to 15.54 per cent in the year-ago period. With improvement in capital position, Goel said, the bank has decided to cut the proposed share sale size through Qualified Institutional Placement (QIP) to Rs 5,000 crore from an earlier estimate of Rs 7,500 crore.
Asked when the capital will be raised, he said the bank is evaluating the opportune time for that. Besides, he said, the board has given approval to raise Rs 7,000 crore from Tier I bonds and Rs 3,000 crore from Tier II bonds to fund business growth.
As far as recovery is concerned, he said, the bank is targeting Rs 18,000 crore collection from this including from NCLT realisation. “We are hoping recovery of Rs 3,000 crore from NCLT cases,” he said.
During the quarter, he said, slippages were Rs 1,755 crore against a recovery of Rs 3,249 crore.
Going forward, the bank is aiming net NPA of less than 0.5 per cent, a gross NPA of less than 4 per cent and a Return on Asset of 1 per cent by March. As far as business growth is concerned, he said, credit growth is estimated at 11-12 per cent while deposit 9-10 per cent and Net Interest Margin at 2.9-3 per cent.
Low-cost fund Current Account and Savings Account (CASA) deposit would increase to 42 per cent from the current level of 40.08 per cent of total deposits, he added. On improving its digital competitiveness, he said, PNB has earmarked Rs 2,500 crore to be spent on IT.
