Home / Companies / People /  ‘PNB eyes double-digit credit growth this fiscal’

NEW DELHI : On top of the challenges of the last two pandemic years, Punjab National Bank (PNB) also had to contend with the amalgamation of two state-run banks. Still, the public sector lender has earned a profit, maintained its CASA share, and also improved its capital adequacy and asset quality, managing director and CEO Atul Kumar Goel said in an email interview. Edited excerpts.


How has been the bank’s performance so far, and what is the outlook for the current fiscal?

The last two years were challenging, with the pandemic affecting all economic sectors and the amalgamation leaving a long-lasting impact on us. Amid such circumstances, we have performed well. We have strengthened our procedures, created verticals for better operational efficiencies, worked on our underwriting standards and were able to infuse more equity through markets. While we remain cautiously optimistic for this financial year—cautiously because we will face challenges the way the global economy is facing headwinds—our focus this year will be on quality growth with profitability. In the first quarter of this financial year, we were able to cross 8 trillion in global advances, which grew at 10% year on year. Our NPAs went down sequentially and yearly. NIM improved by five basis points to 2.79% in Q1 FY2023. 

I hope that the subsequent quarters will be better. The credit demand outlook is positive, with various factors driving this increase. Robust economic growth, revival in the corporate segment, supporting schemes for the MSME segment, and stronger consumer sentiments will all aid double-digit credit growth. We are envisaging a growth of 11%-12% in our advances. 

What segments are driving credit growth, and how does the bank plan to cater to fund requirements for growing segments?

In my opinion, credit growth will get reinforced by economic growth, a rise in government and private capex, an extension of the production-linked incentive (PLI) scheme and various other schemes for the MSME sector. The infrastructure sector will get the requisite thrust through various government reform measures under the 145 trillion-plus National Infrastructure Pipeline and PM Gati Shakti. The retail sector will grow with better consumer demand. With climate emerging as a challenge, the focus is now on developing cleaner and greener economies, and we expect renewable energy to be another sector with huge potential. Low-cost CASA (current and savings accounts) deposit has been our forte. We have increased our deposit rates in tandem with the economic scenario and have also come up with various new drives and schemes to enhance our deposit base. 

What is the focus of the bank for the next few years?

Our medium- and long-term strategy focuses on the three pillars of asset quality, accelerating growth and improving profitability. Better customer experience and transforming operations will be the key enablers to support the above objectives. For asset quality, we have planned to scale up the use of call centres as a key channel to drive collections. 

We also intend to leverage digital tools to improve ease of payment and digitize recovery processes. Growth will be accelerated with focused growth in RAM (Retail, Agriculture and· MSME) segment and digitization of customers’ on-boarding and lending journeys. Profitability will be improved by enhancing fee-based income and wealth management offerings and through rationalization of costs. We are also investing in an omnichannel customer experience platform. We are working on launching our super-app solution through our mobile application, PNB One, where not only the banking products and services but also the lifestyle services and marketplace options will be available.

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