Punjab National Bank Reports Significant Profit Growth in Q4

In a remarkable financial performance, Punjab National Bank (PNB) announced a staggering 51.7% increase in its net profit, reaching ₹4,567 crore for the last quarter of the previous fiscal year. This impressive growth can be attributed to a substantial reduction in provisions for bad loans and a boost in other income streams.

Upcoming Meeting on Bhushan Power and Steel Resolution

During a press conference following the earnings announcement, Ashok Chandra, the bank’s Managing Director and CEO, shared insights about the upcoming meeting of the Committee of Creditors (CoC) concerning Bhushan Power and Steel (BPSL). This meeting, set to take place in the next two to three days, aims to evaluate the implications of the Supreme Court’s decision regarding JSW Steel’s resolution plan.

• Chandra stated, “The Supreme Court ruling is now in effect. The CoC comprises 32 lenders, and we will convene next week for discussions. It is crucial that we engage with our advisors and strategize the best course of action for this account.”

Financial Highlights and Projections

PNB successfully received approximately ₹3,000 crore from the resolution of BPSL and anticipates a credit growth of 11-12% and a deposit growth of 9-10% for the current financial year. Chandra expressed confidence in maintaining the net interest margin within the 2.8-2.9% range.

In the latest quarter, the bank’s net interest income, which is the difference between interest earned and interest paid, increased by 3.8%, amounting to ₹10,757 crore, compared to ₹10,363 crore in the same period last year. However, the net interest margin saw a decline to 2.96%, down from 3.09% in the previous quarter and 3.25% in the same quarter of the last fiscal year.

Improvements in Asset Quality

PNB also reported a significant improvement in asset quality, with the gross non-performing assets (NPA) ratio enhancing by 178 basis points year-on-year to 3.95%. In numerical terms, gross NPAs decreased to ₹44,082 crore, down from ₹45,414 crore. Meanwhile, the net NPA ratio improved by 33 basis points to 0.40%, with net NPAs declining to ₹4,291 crore from ₹4,437 crore.

Capital Raising and Dividend Approval

In a strategic move, the bank’s board has approved a capital raise of up to ₹8,000 crore this fiscal year through the issuance of Basel III-compliant bonds in multiple tranches. Additionally, PNB has recommended a dividend of ₹2.90 per share for FY25, reflecting its commitment to shareholder returns.

These developments underline Punjab National Bank’s robust performance and its proactive approach to navigating the challenges in the financial landscape. The bank remains focused on enhancing its growth trajectory while ensuring improved asset quality and profitability.