PNB's CEO expects loan growth to be in between 12% and 13% in FY24

Atul Kumar Goel, Managing Director and CEO of Punjab National Bank, on Friday, October 27, emphasised lender's commitment to maintain the Net Interest Margin (NIM) within the range of 2.9% to 3%. He acknowledged that the cost of funds had increased by 10-15 basis points quarter-on-quarter, attributing it to the repricing of deposits.

However, Goel expressed confidence in the bank's future outlook, expecting a decline in slippages and credit costs going forward.

"A particularly encouraging aspect of PNB's performance was its recovery in the National Company Law Tribunal (NCLT), which amounted to ₹550 crore in Q2FY24. The bank anticipates further recoveries of ₹2,400 crore from NCLT in the near future," he told CNBC-TV18.

Looking ahead, PNB is focusing on the retail, agriculture, and MSME sectors, collectively referred to as the "RAM" portfolio, which constitutes 55% of the bank's total portfolio. Goel stressed that this focus includes a range of products, including home loans, car loans, and gold loans, not limited to corporate lending.

He added that the demand scenario remains robust for loan growth in these segments, and PNB has set a loan growth guidance of 12-13% for FY24. Additionally, the bank is determined to enhance its provision coverage ratio, further fortifying its financial resilience.

PNB's net profit for the September quarter reached ₹1,756 crore, a substantial leap from the ₹411.27 crore recorded during the same period the previous year. This performance exceeded the expectations of analysts and market experts, as CNBC-TV18's poll estimate had projected a more modest ₹1,229.4 crore.

One of the key highlights of PNB's Q2 performance was the prudent management of provisions. The bank's provisions for the quarter totaled ₹3,444. The bank's asset quality also witnessed a substantial improvement in the second quarter of FY24. The gross non-performing assets (NPAs) ratio dropped to 6.96% as of September 30, down from 7.73% in the previous quarter and significantly lower than the 10.48% recorded in the same period of the previous financial year. In terms of absolute values, gross NPAs were reported at ₹65,563.12 crore by the end of Q2FY24, reflecting a robust effort to clean up the balance sheet.