PNB on track to meet Rs 32,000 crore recovery target from bad assets in FY23: CEO Atul Kumar Goel

City-based Punjab National Bank (PNB) is on track to achieve the target to recover Rs 32,000 crore from bad loans in the current fiscal year, MD & CEO Atul Kumar Goel said on Wednesday.

The recovery target is of Rs 32,000 crore for the current fiscal year and it comes at around Rs 8,000 crore per quarter, Goel told reporters in a post-quarterly earnings call.

"In the June quarter, we have recovered Rs 7,057 crore. In the September quarter, the total recovery was Rs 8,564 crore. It means we are on the right track, whatever is the target per quarter. Definitely, we will be able to achieve the target (for the fiscal)," Goel said.

The state-owned lender posted a net profit of Rs 411 crore in the second quarter ended September of the current fiscal year, down by nearly 63 per cent from a year ago same period.

However, the profit grew by 33.4 per cent from the previous quarter ended June 2022.

The main reason behind the decline in the net profit was higher provisioning towards bad loans.

Bank's provisioning for Q2FY23 rose to Rs 3,556 crore, as against Rs 2,693 crore in the year-ago period.

"I had to do major provisioning of Rs 3,556 crore for NPA (non-performing assets). In addition to that around Rs 450 crore, we were required to provide for the non performing investment (NPI). In addition to that around Rs 900 crore was to be done for standard account as per the June 2019 circular of RBI. So, we were required to provide for this.

"So this was the major reason (for higher provisioning) otherwise our credit cost is reducing and slippages are also reducing," the official said explaining the higher provisioning despite a fall in NPA ratio.
The gross non-performing assets of PNB fell to 10.48 per cent for the quarter ended September 2022 as against 13.63 per cent by end of September 2021. It was down sequentially also against 11.27 per cent in quarter ended June 2022.

Further, Goel said one account may be standard in the account of PNB. However, if it is a non-standard account with some other bank, the provision is still required to be done.

"This was the reason for the Rs 900 crore odd figure that we were required to provide for."

The official said bank's slippages should be less than the recovery numbers as was the case in both June and September quarters.

He said as on date the position is comfortable. "I am not finding any amount more than Rs 100 crore which we have to recognise in the future as an NPA."

The fresh slippages during the first half, April-September period of 2022-23, fell to Rs 9,606 crore from Rs 13,299 crore in the same period. For Q2FY23 it was down at Rs 5,301 crore against Rs 7,620 crore.

Replying to a question on accounts referred to the National Asset Reconstruction Company Limited (NARCL), he said PNB has identified 62 accounts with outstanding of Rs 20,008 crore.

Out of this, for the first phase the bank has identified nine accounts amounting to Rs 2,752 crore. In the second phase, around 11 accounts of Rs 2,685 crore are there. Out of the first phase, Rs 2,752 crore in five accounts, NARCL has given the offer where PNB has an outstanding of Rs 1,099 crore," Goel added.

About the recoveries from the bad accounts referred to NCLT, he said, Rs 693 crore was recovered in June quarter and Rs 778 crore in September quarter.

"And we are hopeful to recover Rs 1,936 crore in the December quarter and Rs 588 crore in the March 2023 quarter."

The lender has also closed its operations of the branch at Hong Kong. Disposal of its major assets and liabilities, the seed capital and accumulated profits have been repatriated.

The MD & CEO said around Rs 252 crore has been repatriated from the Hong Kong branch.