Punjab National Bank (PNB) has reported a significant surge in net profit for the second quarter of 2023, marking the highest profitability in the past 14 quarters. The bank recorded a net profit of INR 1,756.13 crore, a four-fold increase from INR 411.27 crore in the same quarter of the previous year. This growth is primarily attributed to a 31% increase in interest income, which rose to INR 26,355 crore, and a decrease in provisioning to INR 3,444 crore from INR 4,906 crore in Q2 2022.
The bank also reported a 20% rise in net interest income to INR 9,923 crore and a 12% increase in operating profit to INR 6,216 crore. PNB's Gross Non-Performing Assets (NPAs) as a percentage of total loans declined to 6.96% from 10.48% last year. The bank is aiming to reduce its gross NPAs to 6% by March 2024 and net NPA to below 1% by the end of the fiscal year.
PNB's CEO, Atul Kumar Goel confirmed plans to open between 100-150 new branches this fiscal year and reassured that there is no stress on the bank's retail loan portfolio of INR 2.18 lakh crore, which includes an INR 17,467-crore unsecured personal loan portfolio. Goel also stated that credit cost would decrease in future quarters as focus shifts towards retail, agriculture, and MSME sectors (RAM).
Despite concerns from RBI Governor Shaktikanta Das about strong growth in personal loans, PNB monitors its loan portfolio every fortnight for signs of stress. Of the unsecured personal loans, INR 4,056 crore is through digital mode. The bank achieved profitability of over INR 3,000 crore in the first half of the fiscal year (April-September).
The bank is also aiming for a credit growth of 12-13% by the end of the fiscal year and has approval to raise INR 12,000 crore of capital, with INR 6,090 crore already raised.
In terms of share performance, PNB's shares traded at INR 69.40, marking a slight dip of 0.07% from the previous close on the BSE. On Thursday, PNB shares closed at INR 69.81.
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