State-owned Punjab National Bank has raised its asset quality guidance, aiming to reduce net non-performing assets (NPA) to 3.5% by March 2023 from 4.28% as of June 30, 2022.

The Delhi-based lender had previously expected net NPA to fall below 4% by the end of the current financial year.
PNB’s net NPA fell to 4.28% from 5.84% a year ago and 4.8% from January to March 2022.

PNB MD Atul Kumar Goel said: The bank’s total NPA fell 11.27% in April-June from 14.33% a year earlier. Goel said that in absolute terms, the total NPA in June 2022 was Rs 90,167 crore compared to Rs 1.04 trillion in June 2021. PNB seeks to bring NPA totals down to single digits by the end of the financial year.

The bank has assembled a team of about 300 officers to monitor all NPA accounts, Goel said. He added that it was working to improve the recovery rate of non-performing loans and was monitoring all accounts, including those undergoing Sarfaesi or NCLT procedures.

Goel said the bank has recovered more than Rs 7,000 crore in April-June and expects to recover Rs 8,000-9,000 crore per quarter. He added that it wanted to ensure its recovery rate was higher than slippage.

The lenders have identified eight accounts worth Rs 2,486 crore, which will be transferred to National Asset Reconstruction Company Ltd (NARCL). All banks are expected to transfer Rs 50,000 crore of bad loans to NARCL collectively, said Goel, chairman of the Association of Indian Banks and spearheaded the government-backed asset reconstruction firm.

On Friday, the bank reported its April-June net profit fell 70% to 308.4 crore rupees. The decline was due to lower Treasury profits due to higher interest rates and mark-to-market losses, Goel said. Goel said the US Treasury’s profit fell to Rs 573 crore in the April-June 2022 period from Rs 1,118 crore in the June 2021 quarter.

He added that in April-June 2022, PNB’s MTM loss reached Rs 1,409 crore, while in the June 2021 quarter, the MTM reversal was around Rs 301 crore.