India’s second-biggest lender Punjab National Bank (PNB) expects to triple its net profit throughout the existing economic year to Rs 6,000 crore, compared to Rs 2,022 crore throughout FY21, MD and CEO SS Mallikarjuna Rao mentioned on Saturday.
The lender also expects to develop its loan book by 8% throughout FY22, regardless of Covid-associated impacts. However, the domestic advances of the lender had declined 3% year on year (YoY) to Rs 7.19 lakh crore throughout the March quarter (Q4FY21).
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“For FY22, our net profit should not be less than Rs 6,000 crore at the conservative level. It all depends on credit growth, demand in the economy,” PNB MD SS Mallikarjuna Rao mentioned on Saturday throughout the earnings get in touch with. Rao, having said that, pointed out that correct estimation could be completed following the finish of the 1st quarter of FY22.
On loan development, Rao mentioned, “At the conservative-level, we would like to show a growth rate of 8% if the economy moves on expected lines where the GDP growth is 9.5% and the Covid-19 impact is reduced or eliminated by June.”
The lender has identified non-performing assets (NPAs) worth Rs 8,000 crore that it will transfer to the National Asset Reconstruction Company (NARCL), Rao mentioned. However, the operational suggestions are in the final stages, and the selection no matter if such assets will have to be transferred to NARCL at net book worth, is however to be taken, Rao added.
With regard to PNB Housing Finance, Rao mentioned, the bank would not divest its stake in the housing finance enterprise. However, the stake of PNB will be diluted to about 20% due to equity raising problem by the housing financier.
PNB Housing Finance’s board has authorized a capital raise of up to Rs 4,000 crore by issuing equity shares and convertible warrants to entities led by Carlyle Group firms.
PNB on Friday reported a net profit of Rs 586 crore for the quarter ended March 31, 2020, on the back of greater net interest earnings and other earnings.
The bank had reported a loss of Rs 697 crore in the year- ago quarter. It’s net interest earnings (NII) rose 48% YoY to Rs 6,937 crore throughout the March quarter.
Similarly, non-interest earnings rose 48% YoY to Rs 3,742 crore in the quarter beneath evaluation. However, provisions fell 4.39% throughout the quarter to Rs 4,686 crore.