PNB revises NPA guidance as slippage less than recovery number in September quarter

Punjab National Bank (PNB) is revising its net performing asset (NPA) guidance as slippage is less than the recovery number in September quarter, said Atul Kumar Goel, MD & CEO of the bank while talking to CNBCTV18.

"The net NPA of Punjab National Bank (PNB) is expected  to be 3 percent or less by March 2023. Last time, we said that our gross NPA by March 2023 will be in single digits. So, we are maintaining it," he said.

Earlier, PNB said that net NPA would be less by 3.5 percent. Kumar has revised this to 3 percent now.

The gross NPAs declined to 10.48 percent of the gross advances from 13.36 percent earlier in September quarter. In absolute terms, the gross NPAs or bad loans stood at Rs 87,034.79 crore at the end of the second quarter of FY23 as compared to Rs 1,00,290.85 crore a year earlier.

The company also expects FY23 loan growth to be higher at 12-13 percent versus earlier guidance of 10 percent.

Goel said, “Loan growth on a year on year basis is 12.84 percent. Last time, we had guided that loan growth will be around 10 percent but now we are revising that to be in the range of 12 and 13 percent.”

Goel further expects Net Interest Margins (NIMs) to remain between 2.9 and 3 percent.

“Our net interest margin (NIM) was 2.9 percent in last quarter and 3.11 percent is the current quarter. So we are giving the guidance that NIMs will remain within the range of 2.9 and 3 percent,” he said.

Meanwhile, PNB reported its best net interest income growth in 10 quarters even as slippages remained elevated. The company saw its net profit decline by 62.8 percent to Rs 411.3 crore in the September quarter against Rs 1,105.2 crore in the year ago period.

The bank’s net interest income (NII) grew by 30.2 percent to Rs 8,270.7 crore in Q2FY23 versus Rs 6,352.8 crore in Q2FY22.