PNB targets ₹16k-cr recovery, aims to keep slippages below 1% in FY26: MD

Punjab National Bank (PNB) is targeting a significant recovery of Rs 16,000 crore and aims to keep slippages below 1 per cent in the current fiscal year to sustain profitability, the top official of the country's second biggest state-owned lender said.

The total recovery of the bank stood at Rs 4,733 crore for the fourth quarter and Rs 14,336 crore for FY25 while overall slippages ratio was 0.73 per cent during the last financial year.

"Going forward, maximization of recovery and preventing fresh slippages are going to be priority areas. We are targeting a higher total recovery of Rs 16,000 crore as against of recovery of about Rs 14,000 crore in FY'25...we are expecting that the quarterly our slippages will be in the range of around Rs 1,500 crore to Rs 1,700 crore," PNB MD and CEO Ashok Chandra told PTI in an interview.

The bank is going to focus on recovery through the technical write off accounts, he said, adding, "I am expecting that Rs 6,000 crore of recovery will happen in the technical right off book. So, we have set up a target of Rs 1,500 crore of minimum recovery every quarter."  The technical write off book of the bank stands around Rs 91,000 crore with the provision coverage ratio of more than 96 per cent and recoveries from such accounts are added to the bottomline directly. 

Chunky assets are no longer there but there are a lot of NPA accounts in the range of Rs 25 crore to Rs 50 crore where recoveries are expected, he added.

The bank also plans to expand its RAM (retail, agriculture and MSMEs) sector lending to 58 per cent of its loan book in the current financial year with the help of various initiatives taken, including loan outreach.

The bank closed FY25 with loan outstanding under RAM segment at Rs 6,02,682 crore, 56 per cent of the loan book.

"We are planning to increase RAM from 56 per cent to 58 per cent in this financial year because that will give me the cushion against loss which is happening due to reduction in the interest rate in the corporate and the RLLR (repo-linked lending rate) loan book," he said.

The volume increase in the RAM segment will help compensate for a loss due to further rate cuts, he said.

For the financial year ended March 2025, PNB has emerged as the top bank in terms of profit growth among 12 public sector banks (PSBs) with a 102 per cent rise. The bank's net profit doubled to Rs 16,630 crore compared to Rs 8,245 crore in the previous fiscal.

The bank has reported a 14 per cent rise in total business at Rs 26.83 lakh crore in FY25, one of the highest in the banking system.