Punjab & Sind Bank is planning to add 20 branches and raise Rs 250 crore in FY24 to fuel its growth.

The state-owned bank will primarily raise the amount through equity, but a mix of debt can’t be ruled out.

“We have written to the government for its approval. Our merchant bankers are ready,” said Punjab & Sind managing director and chief executive officer Swarup Kumar Saha.

The timing of the issue will depend on the market conditions. “We are primarily looking to raise Rs 250 crore via equity but options are open for both (debt and equity), Saha said.

The lender’s March quarter net profit of Rs 457 crore, up 32% year-on-year, was driven by a robust recovery in written off accounts along with growth in advances. The new branches, opened to expand the bank’s footprint, also started giving better business. The quarter-on-quarter net profit growth was 22.43%.

For the entire fiscal year 2022-23, Punjab & Sind Bank recorded its highest-ever net profit of Rs1,313 crore, up 26.37% from of Rs 1,039 crore a year ago.

The yearly net interest margin has also increased by 11 basis points to 2.91% from 2.80%. The yearly net interest income (NII) has increased to 12.10% and ROA risen by 13 basis points to 0.98% (and quarterly by 23 bps to 1.33%).

Punjab & Sind Bank recovered Rs 340 crore from its written off loans in the fiscal fourth quarter ended March 2023. The board of directors of the bank declared a dividend of Rs 0.48 per equity share (4.8%).

For the fourth quarter ended March 2023, the lender's NII, however, fell by 1.97% YoY and by 15.05% QoQ to Rs 683.78 crore. 

Saha said the credit growth for the banking sector may moderate but Punjab & Sind Bank would still maintain a double-digit credit growth of 13% in FY24, with a continued focus on the RAM (retail, agriculture and MSME) sector. 

The bank is working towards improving its net interest margin in FY24 to over 2.95%. It is also aiming to have 55% of its assets from the retail segment while the remaining 45% would be from the corporate sector.

“We have been able to maintain an all-round growth in advances, make good recoveries, expand our branch network and improve our net interest margins,” Saha told reporters. 

The bank, which opened 20 branches during FY23, wants to add 20 more in the current financial year. The lender has a total network of 1,553 branches. "Our strategy will continue to be to expand our footprint and grow our business," Saha said.

The total business of the bank grew 10.50% to Rs 1,90,647 crore at the end of the financial year ended March 31, 2023. 

Total advances grew 15.05% to Rs 80,982 crore while deposits rose 7.37% to Rs 1,09,665 crore. The credit-to-deposit ratio of the bank grew by 439 basis points to 73.84%.

The bank’s total income grew 32% to Rs 2,652 crore for the quarter ended March 2023. 

The bank's asset quality improved, with gross non-performing assets (NPAs) declining to 6.97% in the March quarter from 12.17% a year ago and 8.36 % a quarter ago. 

Net NPA fell to 1.84% from 2.74% in Q4FY22 and 2.02% in Q3FY23. 

The bank wrote off Rs 510 crore in the fourth quarter, taking the total write-offs during the year to Rs 2,128 crore.

“Following the government’s directive of striving for 40% recoveries from written off loans, we have already started on that path. This quarter also we have made some handsome recoveries. We have a good pipeline for recoveries,” Saha told reporters.