PNB expects to triple FY22 net profit, identifies Rs 8,000 crore NPAs for NARCL

On loan growth, Rao said, “At the conservative-level, we would like to show a growth rate of 8% if the economy moves on expected lines where the GDP growth is 9.5% and the Covid-19 impact is reduced or eliminated by June.”

India’s second-largest lender Punjab National Bank (PNB) expects to triple its net profit during the current financial year to Rs 6,000 crore, compared to Rs 2,022 crore during FY21, MD and CEO SS Mallikarjuna Rao said on Saturday.

The lender also expects to grow its loan book by 8% during FY22, despite Covid-related impacts. However, the domestic advances of the lender had declined 3% year on year (YoY) to Rs 7.19 lakh crore during the March quarter (Q4FY21).

“For FY22, our net profit should not be less than Rs 6,000 crore at the conservative level. It all depends on credit growth, demand in the economy,” PNB MD SS Mallikarjuna Rao said on Saturday during the earnings call. Rao, however, mentioned that accurate estimation could be done after the end of the first quarter of FY22.

On loan growth, Rao said, “At the conservative-level, we would like to show a growth rate of 8% if the economy moves on expected lines where the GDP growth is 9.5% and the Covid-19 impact is reduced or eliminated by June.”

The lender has identified non-performing assets (NPAs) worth Rs 8,000 crore that it will transfer to the National Asset Reconstruction Company (NARCL), Rao said. However, the operational guidelines are in the final stages, and the decision whether such assets will have to be transferred to NARCL at net book value, is yet to be taken, Rao added.

With regard to PNB Housing Finance, Rao said, the bank would not divest its stake in the housing finance company. However, the stake of PNB will be diluted to around 20% due to equity raising issue by the housing financier.

PNB Housing Finance’s board has approved a capital raise of up to Rs 4,000 crore by issuing equity shares and convertible warrants to entities led by Carlyle Group firms.

PNB on Friday reported a net profit of Rs 586 crore for the quarter ended March 31, 2020, on the back of higher net interest income and other income.

The bank had reported a loss of Rs 697 crore in the year- ago quarter. It’s net interest income (NII) rose 48% YoY to Rs 6,937 crore during the March quarter.

Similarly, non-interest income rose 48% YoY to Rs 3,742 crore in the quarter under review. However, provisions fell 4.39% during the quarter to Rs 4,686 crore.