Asset quality has improved due to strong recovery and upgrades in Q2: PNB

The bank's operating profit too declined to Rs 4,021.12 crore from Rs 5,674.91 crore in the same quarter in the previous financial year.

On the asset quality front, the lender's gross non-performing assets (NPAs) increased marginally to 13.63 percent of the gross advances at the end of September 2021, from 13.43 percent a year ago period. Net NPAs also increased to 5.49 percent as against 4.75 percent a year ago.

On asset quality SS Mallikarjuna Rao, MD and CEO of PNB said, “Quarter-on-quarter there has been a reduction in gross NPA to 13.63 and net NPA to 5.49. This has been possible because the recoveries and upgradation during the current quarter in all the segment. Collection efficiencies from July onwards, it has been better as a result of better control on recoveries.”

“In the next two quarters to come, we are very confident of controlling slippages and also expecting recovery in various accounts. I am not seeing much of a concern on assets quality,” he added.

With regards of reduction in operating profits, Rao said, “There were one time expenditures which we took related to family pension. We have increased provisions and couple of expenses which happen in Q1 have happened in Q2. If you look at even the provisions there has been reduction in the provision and as a result we could show net profit of Rs 1,103 crore which is almost 78 percent increase year-on-year.”

On loan growth, Rao said, “On credit growth we have seen overall growth at around 2.7 percent. Retail has grown by 6.7 percent, housing has grown by 6 percent, and corporate book has shown good improvement in spite of high amount of pressure on interest rates. We are able to create good pipelines for disbursements and as a result we are confident of showing around 6 to 8 percent growth by March 2022 in terms of the overall credit.”