State-owned Punjab National Bank (PNB) will bring down gross non-performing assets (GNPA) down to a single digit in the current financial year, and would ensure slippages are less than recovery from bad loans, its Managing Director Atul Kumar Goel said.
“Our target is that every quarter, additions should be less than the recovery…On the basis of this plan, I am telling you gross (NPA) numbers will come in the single digit. We will monitor this from the top into the zonal, circle heads on a fortnightly basis,” Goel said at post earning press conference.
The lender declared its January-March earnings Wednesday, and posted a drop in its gross NPAs to 11.78 per cent from 14.12 per cent reported a year ago. Gross NPAs in October-December 2021 were 12.88 per cent. In absolute terms, gross NPAs were Rs 92,448 crore as on March 2022. Net NPAs stood at 4.80 per cent from 5.73 per cent a year ago and 4.90 per cent a quarter ago.
PNB will aim to bring down net NPAs below 4 per cent in the financial year 2022-23, Goel said.
The bank has been able to recover Rs 6,321 crore from bad loans in FY22 from Rs 2,498 crore recovered in the previous financial year, Goel said. The total outstanding of bad loans referred to National Company Law Tribunal (NCLT) is Rs 68,550 crore for which the bank has made provisions of Rs 66,800 crore, taking the total provision coverage to 97.53 per cent, Goel said.
"So if any recovery from NCLT cases..entire money will help in increasing the profitability of the bank,” Goel said. The bank is expecting recovery of around Rs 2,000 crore in the first half of the financial year (April-September) through NCLT cases.
The lender has identified bad loans worth Rs 8,000 crore, that have been fully provided for, to be transferred to government-backed National Asset Reconstruction Company Ltd (NARCL). NPAs worth Rs 2,700 crore will be transferred to NARCL in the first phase, and the deal is expected to be completed in 2-3 months, he added.
Goel also said that he sees a 10 per cent credit growth in current year as against a growth of 6 per cent last year on the back of 'good' demand in steel and cement industry, and upcoming road or infrastructure projects.