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NEW DELHI: State-run Punjab National Bank (PNB) on Thursday reported an over four-fold jump in net profit to Rs 1,756 crore during the September quarter, the highest in 14 quarters, compared with Rs 411 crore during the corresponding period last year, as provisions and contingencies declined, and the lender saw higher interest income and improvement in asset quality.
“It will be sustainable as fresh slippage in non-performing assets is less than 1% of advances and we have been reducing it for five quarters.This number will not increase in the coming quarters. My provision coverage ratio has improved and the requirement for provisions has reduced. We have also made adequate provisions for wage revision,” PNB MD & CEO Atul Kumar Goel toldTOI.
While there have been some concerns on the asset quality, especially for unsecured loans, Goel said the share of this segment in the overall loan portfolio was very low at Rs 25,700 crore.
He also said that the bank did not see any significant pressure on the interest rate side due to higher cost of deposits, maintaining that PNB had seen over 9% growth in deposits and it had significant headroom to free funds that could be used for lending. “We have 10,000 branches and we have opened over 51 lakh new savings bank accounts so far this year, compared to 85 lakh in the last financial year. That is why we are not seeking bulk deposits,” he said.
While retail lending demand has been strong, Goel said that the corporate sector was cautious in seeking fresh loans. “There is good demand for infrastructure and therefore for cement and steel. There is not too much expansion as customers have become risk averse due to IBC,” he said.
“It will be sustainable as fresh slippage in non-performing assets is less than 1% of advances and we have been reducing it for five quarters.This number will not increase in the coming quarters. My provision coverage ratio has improved and the requirement for provisions has reduced. We have also made adequate provisions for wage revision,” PNB MD & CEO Atul Kumar Goel toldTOI.
While there have been some concerns on the asset quality, especially for unsecured loans, Goel said the share of this segment in the overall loan portfolio was very low at Rs 25,700 crore.
He also said that the bank did not see any significant pressure on the interest rate side due to higher cost of deposits, maintaining that PNB had seen over 9% growth in deposits and it had significant headroom to free funds that could be used for lending. “We have 10,000 branches and we have opened over 51 lakh new savings bank accounts so far this year, compared to 85 lakh in the last financial year. That is why we are not seeking bulk deposits,” he said.
While retail lending demand has been strong, Goel said that the corporate sector was cautious in seeking fresh loans. “There is good demand for infrastructure and therefore for cement and steel. There is not too much expansion as customers have become risk averse due to IBC,” he said.
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