(HT)
Punjab National Bank (PNB), India’s second-largest state-run lender by assets, aims to recover more soured loans this year, leading to a record-low gross bad loan ratio, a key asset quality metric, CEO Ashok Chandra said on Thursday.
The New Delhi-based lender is targeting bad loan recoveries worth ₹16,000 crore ($1.89 billion) this financial year, an eleven-fold increase over the ₹1,436 crore recovered in 2024-25, Chandra told Reuters in an interview.
About ₹6,000 crore of that is expected to come from loan accounts which were previously written off, he said.
That would help lower its gross non-performing asset (NPA) ratio to under 3% by the end of 2025-26, which would be PNB’s lowest on record.
Its gross NPA ratio improved to 3.95% at the end of March from 4.09% at the end of December.
That is a far cry from a gross NPA ratio of 14.33% in the aftermath of the covid-19 pandemic following a debilitating corporate bad loan cycle between 2011 and 2019.
On Wednesday, PNB reported a near-52% jump in net profit for the January-March quarter, partly as it set aside lesser money for bad loans. Its domestic loan growth was 13.1%, while deposits rose 13.3%.
PNB expects its loan book to grow 11-12% in the financial year that started in April, and deposits to increase by 9-10%, Chandra said.
It has a corporate loan book pipeline of ₹1.35 lakh crore and expects a 16-17% growth in loans to medium and small enterprises, he added.
However, since the impact of the central bank’s rate cuts typically comes with a lag, PNB’s cost of funds will stay elevated for a couple of quarters, Chandra said.
Separately, PNB is in touch with fellow lenders to Bhushan Power and Steel to finalise the next course of action after the Supreme Court scrapped JSW Steel’s four-year-old buyout of the beleaguered company, Chandra said.
PNB has received about 30 billion rupees from JSW Steel as a part of the resolution. “All options will be explored on what is the way out.”
