State-run Punjab National Bank, which returned to the black in the December quarter with a modest profit after three successive quarters of massive losses, has set a target of recovering ₹10,000 crore from bad loans in the March quarter.
So far this fiscal year, the once-second largest lender had made recoveries worth ₹16,600 crore from bad loans, the lender said.
The New Delhi-based bank, which was hit hard by the ₹14,000-crore Nirav Modi-Mehul Choksi scam in February 2018, had Tuesday pencilled in a net profit of ₹247 crore for the December quarter.
"We expect a recovery of ₹10,000 crore from NPAs in which include ₹6,000 crore from Bhushan Power & Steel and Essar Steel (both at the NCLTs) in the current quarter," managing director and chief executive Sunil Mehta told reporters after an analysts meet here.
He said the balance ₹4,000 crore of the planned recovery will be from smaller accounts as well as from a few NCLT accounts.
Mehta said the bank will get ₹1,800 crore as write- back on provisions made for Bhushan Power & Steel and Essar Steel in the March quarter. Both these companies are at the last leg of the resolution process, as the NCLTs have cleared the bids by JSW Steel and ArcelorMittal, respectively.
During the nine months of FY19, the bank's recoveries from bad loans stood at ₹16,600 crore, he said.
Its exposure to NCLT accounts is ₹36,367 crore for which it has made a provision for 75.1 per cent. It is also in the process of selling stake in its housing finance arm PNB Housing Finance. The last date for accepting the bids is February 8.
It has also put on block its erstwhile headquarters at Bhikaji Cama Place in south Delhi and Mehta hopes both the transactions to be completed in the current quarter.
During the quarter, gross NPA declined to 16.33 percent, and net NPAs to 8.22 percent. The reporting quarter saw fresh slippages of ₹3,324 crore.
Mehta said the bank has a small exposure to the crisis-ridden IL&FS after ₹313 crore of loans have already slipped into NPAs.
The bank has so far sold seven NPAs worth ₹1,200 crore to asset reconstruction companies this year and has lined up ₹1,000 crore for sale in the fourth quarter.
Mehta said no more provisioning is required for the Nirav Modi-Mehul Choksi accounts, where its exposure is over ₹14,000 crore, as it has already made 100 percent provisioning. During the reporting quarter, it has made a provision of ₹2,000 crore for this.
"We are now working on a clean slate and with the upside expected from recoveries and sale of non-crore assets, we will do better in the fourth quarter," Mehta said.
PNB had logged in a net loss of ₹13,416.91 crore for the March 18-- the largest ever in the nation's banking history--after the scam was revealed. It had posted a net loss of ₹4,532.35 crore and ₹940 crore during the second and first quarters of the current fiscal year, respectively.
The PNB counter jumped 2.24 percent to ₹75.20 on the BSE against a 1 percent rally in the benchmark.
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