Punjab National Bank (PNB) reported a 327% year-on-year rise in net profit to Rs 1,756 crore for the September quarter, its highest in the previous 14 quarters. This came on the back of higher interest income and lower provisions as asset quality improved. 

The state-run bank’s net interest income (NII) rose to Rs 9,923 crore in the fiscal second quarter ended September, up 20% year-on-year.

Net interest margin was at 3.24% as against Rs 3.11% a year ago and 3.21% in the preceding quarter.

The bank’s operating profit grew 12% to Rs 6,216 crore.

“This is the bank’s best performance in the last 14 quarters in terms of net interest income and profitability. We hope to end the year with a profit of over Rs 6,000 crore,” said Punjab National Bank managing director and CEO Atul Goel in a media interaction.

“Credit cost will reduce in the coming quarters and profitability of the bank will increase,” he added.

Improving asset quality helped the bank to lower its provisions by 29.8% in the September quarter to Rs 3,444 crore from Rs 4,906 crore in the year-ago period. 

“The RAM sector will be our focus area to grow the business,” Goel said.

PNB will open 100-150 new branches in the current fiscal.

Goel said there is no stress on the bank's retail loan portfolio, which stands at Rs 2.18 lakh crore as of 30 September 2023, up 40.42% year-on-year. Of this, the unsecured loan portfolio is Rs 25,770 crore, including Rs 17,467 crore of personal loan. “It has a delinquency of just 1% and there is nothing to worry about,” Goel added.

During the quarter, the bank's retail loan portfolio, which encompasses vehicle, education, and personal loans, displayed robust growth. According to the bank's earnings report, housing loans increased by 13.7% year-on-year to Rs 87,430 crore. Vehicle loans increased by 28.3% to Rs 18,010 crore while the personal loan segment grew 39 to Rs 19,868 crore.

The lender's gross non-performing assets (NPAs) declined to 6.96 % as of 30 September, from 10.48% a year ago. 

The aim is to bring down gross NPA to 6% by March 2024, Goel said.

Net NPA fell to 1.47%  from 3.80% and the target is to bring it further down to below 1% by the fiscal-end.

Goel said the fiscal-end target of 12-13% loan growth will be achieved. PNB had a 13.8% credit growth in the first half of the fiscal.

Deposits grew 9.75% year-on-year to Rs 13,09,910 crore as of September 2023. 

The bank’s loan book grew 13.43% year-on-year to Rs 9,41,721 crore.

The bank has the board's approval to raise Rs 12,000 crore of capital.

"Of this, we have already raised Rs 6,090 crore. We do not have any immediate requirement of capital raising," Goel added.