We may lend to a telco if it gets AAA rating: PNB MD & CEO Atul Kumar Goel

Punjab National Bank (PNB) has turned down the request of Vodafone Idea (Vi) for fresh lending, said the bank’s Managing Director and Chief Executive Officer (MD & CEO) Atul Kumar Goel in a video interview with Harsh Kumar, adding that the possibility will only arise if the company gets AAA rating. Goel discussed the public sector lender’s latest quarterly results and its expansion plans. Edited excerpts:

 

What kind of effort is PNB making to increase deposits?

 

There are not many challenges in deposit growth for Punjab National Bank as we have more than 10,000 branches and have added almost 6 million customers in the first part of this financial year. As we open accounts, money will come into them. Additionally, the PNB One app is helping us increase account openings by making the process very easy. Currently, raising bulk deposits would be costly for us, so we are avoiding that. We have also specifically launched an app targeting our corporate users, which is helping us gain more current accounts. Within a month, we have opened almost 19,000 accounts through it.

 

Have Vi and MTNL approached you for fresh lending? Will PNB lend to them?

 

We have very little exposure to MTNL — less than Rs 500 crore so far. For Vi, we have received a request from them, but we have not approved it yet. However, if any telecommunications company receives an AAA rating, we may consider lending to them. As of now, we have received some requests from Vi in writing, which we have denied.

 

How much recovery has PNB made so far in Q2, and what’s the way ahead?

 

So far, we have made recoveries of Rs 8,000 crore out of our total target of Rs 18,000 crore for FY25. We expect to recover the remaining Rs 1,000 crore this year. In Q2FY25, our cash recovery was Rs 1,508 crore, with Rs 1,407 crore coming from upgrades. Our total recovery for this quarter was almost Rs 4,891 crore. We also made recoveries of Rs 964 crore from the agriculture sector, Rs 1,116 crore from MSMEs, Rs 585 crore from retail, and Rs 2,027 crore from other sectors. Additionally, we achieved a major recovery of Rs 1,000 crore through the NCLT, as two significant corporate accounts in the energy sector have been resolved.

 

What will be your outlook for FY25?

 

We are expecting credit growth of 12 per cent for FY25. We hope to open 150 more branches this financial year. We have already increased our net profit by 145 per cent to Rs 4,303 crore in Q2FY25, compared to Rs 1,756 crore in Q2FY24. Our return on assets (RoA) improved to 1.02 per cent in Q2FY25 from 0.46 per cent in Q2FY24. The return on equity (RoE) improved to 19.91 per cent in Q2FY25 from 10.15 per cent in Q2FY24. Net interest income (NII) increased to Rs 10,517 crore in Q2FY25 from Rs 9,923 crore in Q2FY24, showing an improvement of 5.99 per cent year-on-year (Y-o-Y).

 

Since you are the sponsor of nine RRBs, how are you looking at them for initial public offerings?

 

Three of our RRBs — Prathama UP Gramin Bank, Punjab Gramin Bank, and Sarva Haryana Gramin Bank — are doing very well. However, it will take time; investors need to be comfortable for IPOs. Though I see possibilities of IPO in Prathma looking at its business portfolios, yet it will take some time.