PNB gains credit growth rate by 4-6 per cent in post-Covid scenario

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MD of PNB Mallikarjun Rao is seen flanked by other officers announcing the Q2 Financial Results today
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Punjab National Bank, (PNB) has announced that both home and auto loans have gained momentum and are heading to the pre-Covid19 levels.

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Making a statement to this effect during an announcement of its financial results for 2nd quarter ending 2020-21 in a virtual press conference today, MD and CEO of the Bank CH SS Mallikarjuna Rao highlighted key point of the September-quarter result as well as the recent economic developments in the wake of COVID-19 pandemic.

Rao said that the festive season will signal the economic revival and maintained the overall credit growth to grow at 4-6 per cent for the current fiscal though a more realistic picture will be known by December 2020. However, Corporate loans also have shown resurgence, especially those from roads, steel, cement, healthcare and parts of infrastructure industries. He said the demand remains healthy and may improve further in the coming days, he said.

Regarding the retail and MSME loan restructuring, he said overall Rs 20,000 crore may be restructured by December but it could be much lesser than originally estimated. He clarified that the Bank was adequately capitalised. However, he stated that Bank has the approval to raise funds to the tune of Rs.14000 crores by way of Tier II, AT-1, QIP of Rs.4000 crores, Rs.3000 crores & Rs.7000 crores respectively.

The bank achieved an improvement in Net Interest Income by shedding the high-cost deposits from the amalgamated entity. He also spoke about MSME, net interest margin (NIM) besides other important economic and financial subjects.

Here are major excerpts from the Press conference:

  1. Global Business of the Bank at Rs. 17,86,670 Crore with a YoY growth of 1.06%.
  2. Global Deposit of the Bank grew by 1.37% on Y-o-Y basis to Rs. 10,69,747 Crore.
  3. Domestic CASA Share improved by 253 bps on a Y-o-Y basis to 44.10% in Sept’20. CASA Deposits grew by 7.01% on Y-o-Y basis to Rs. 4,59,477 Crore in Sept’20. Savings Deposit grew YoY by 9.05%.
  4. Gross Global Credit grew by 0.59% on Y-o-Y basis to Rs. 7,16,924 Crore.
  5. Retail, Agriculture & MSME (RAM) Credit grew by 5.73% on Y-o-Y basis to Rs. 3,76,477 Crore.
  6. Retail Credit grew by 3.85% on Y-o-Y basis to Rs. 1,30,158 Crore in Sept’20. Housing loan grew by 9.77% on Y-o-Y basis to Rs. 83,929 Crore in Sept’20.
  7. CRAR as per Basel III increased to 12.84% in Sept’20 from 12.63% in June’20.
  8. Operating profit grew by 7.1% on Y-o-Y basis to Rs. 5,675 Crore in Q2 FY’21.
  9. Net Profit for the quarter is at Rs. 621 Crore as on Sept’20 as against Net Profit of Rs 308 crore and Rs. 757 Crore as on June’20 and Sept’19 respectively.
  10. Global NIM improved to 3.21% in Q2FY21 from 2.5% in Q1FY21 and 2.58% in Q2FY20.
  11. NNPA ratio at 4.75% in Sep’20 improved by 64 bps from 5.39% in June’20.
  12. Provision Coverage Ratio (PCR) improved by 225 bps to 83.00% as on Sept’20 from 80.75% as on June’20.
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