Money & Banking

K.R. Srivats | New Delhi, May 13 | Updated on: May 13, 2022

Will also raise capital to tune of ₹12,000 crore this fiscal to fund expected overall credit growth of 10 per cent

Punjab National Bank (PNB),is aiming to recover ₹6,000 crore this fiscal from the NCLT cases , its Managing Director & CEO Atul Kumar Goel, has said.

The public sector bank has aggregate exposure of ₹68,550 crore, out of which ₹66,852 crore has already been provided for, reflecting a provision of 97.52 per cent of this amount, Goel told analysts after declaration of Q4 results.

If this recovery of ₹6,000 crore were to be achieved, most of it would only go to the profit and loss account for 2022–23, Goel is understood to have conveyed. 

In fiscal 2020–21, PNB’s recovery from NCLT cases stood at ₹2,703 crore. This would mean that the bank is hopeful of achieving this fiscal more than double the amount recovered last fiscal, a banking industry observer said.

Meanwhile, Goel has conveyed to analysts that the bank management would this fiscal endeavour to ensure that the addition in slippages would be less than recoveries. This remark is significant as the just ended March quarter presented a worrying picture on slippages at ₹ 10,506 crore.

Goel said that most of this slippage was accounted for by small accounts at about ₹6,000 crore. “I don’t foresee any more slippages from any big accounts. There are no big lumpy accounts in the bank that could present any concern going forward (for potential slippages)”, he noted.

Capital raising

Goel said PNB will look to raise capital to the tune of ₹12,000 crore this fiscal to fund its expected 10 per cent overall credit growth. Of this ₹12,000 crore, as much as ₹5,500 crore will come through AT1 bonds and the remaining ₹6,500 crore through Tier-2 bonds.

Goel said that there is now robust demand for credit from the road, steel and cement sectors, with several players now looking for expansion of their existing capacities.

PNB currently had a capital adequacy ratio of 14.32 per cent as of end March 2022, higher than 14.32 per cent in March 2021.

In last two financial years, PNB raised capital of ₹2,718 crore in 2020-21 and ₹1,800 crore in 2021–22 by way of qualified institutional placement (QIP). As far as AT1 bonds are concerned, PNB raised ₹495 crore in 2020–21 and ₹3,971 crore in 2021–22. In the case of Tier 2 capital, PNB had raised ₹ 3992 crore in 2020-21  and ₹ 1119 crore in last financial year.

Goel said that PNB has already got board approval in March 2022 to raise capital of ₹ 12,000 crore.

Future group

Asked about PNB’s exposure to Future Group, Goel said that it was ₹1,600 crore, out of which 50 per cent had already slipped into non-performing assets in the last financial year. PNB has already made a provision to the tune of 70 per cent of the amount turned as NPA, he said.  

Published on May 13, 2022