Back

Analyst Meet / AGM - Analyst Meet

Expects recoveries and upgradations to be ahead of fresh slippages in FY2017

Punjab National Bank

24-May-2016, 04:56
Punjab National Bank conducted an analyst meet on 24 May 2016 to discuss the financial performance of bank for the quarter ended March and the prospects of the bank. Usha Ananthasubramanian - MD&CEO addressed the meet: Highlights:

The loan book of the bank increased 10% yoy to Rs 432775 crore, while the deposits also moved up 10% yoy to Rs 553051 crore at end March 2016. Credit deposit ratio improved to 74.6% at end March 2016 from 71.6% a quarter ago, while it was steady compared with 75.9% a year ago.
The bank has been strongly focusing on small ticket loans, while the share of small ticket loans has increased to 57.6% at end March 2016 from 55.6% at end March 2015 and 52.9% at end March 2014.
The fresh slippages of advances surged to Rs 41060 crore in FY2016 from Rs 16660 crore in FY2016, of which Rs 11760 crore came from asset quality review (AQR) of the banking system by RBI and advice to the banks to classify certain weak accounts as NPAs. Meanwhile, the bank has also taken initiative in identifying other weak accounts.
The standard restructured advance book of the bank has declined to Rs 20144 crore at end March 2016 from Rs 35004 crore at end December 2015. In Q4FY2016, bank has converted about Rs 4000 crore of electricity discom restructured loans into bonds, while slippages in the restructured advance book amounted to Rs 1620 crore.
Bank has been strongly focusing on recoveries of NPAs. Bank expects the recoveries and upgradations to be above fresh slippages of advances in FY2017. Bank has targeted strong recoveries and upgradations of Rs 5000 crore for the quarter ending June 2016. The actual recoveries and upgradations for the first 45 days of Q1FY2017 stood at Rs 1900 crore.
The bank has conducted asset sale of Rs 1836 crore to asset reconstruction companies (ARCs) in FY2016. The bank is building further pipeline of assets sale. The bank is targeting the accounts where it's a consortium lender or sole lender as well as accounts with higher collateral coverage for the asset sale.
The outstanding refinancing under 5/25 scheme stands at Rs 7600 crore for 17 accounts, of which Rs 2567 crore has slipped to NPA category.
The outstanding Strategic Debt Restructuring (SDR) stands at Rs 5458 crore for 9 accounts, of which Rs 2061 crore has slipped to NPA category.
The bank has exposure of Rs 2218 crore to the Punjab State Food Corporation account, which has become NPA. The Bank has made provision of Rs 166 crore at the rate 7.5% in Q4FY2016, while the balance Rs 166 crore is proposed to be made in Q1FY2017.
Bank has improved the CASA ratio to 41.6% at end March 2016 compared to 40.4% at end December 2015 and 40.6% at end March 2015. Meanwhile, the bank has sharply reduced bulk deposits to 0.24% of advances at end March 2016 from 0.53% a quarter ago and 2.42% a year ago.
Net Interest Margin (NIM) of the bank declined to 2.60% in FY2016 from 3.15% in FY2015. The cost of funds eased 21 bps yoy to 4.93%, but the yield on funds plunged 72 bps yoy to 7.28% causing the sharp decline in NIMs in FY2016.
The PMJDY account strength stood at 1 crore, while balances improved to Rs 1600 crore at end March 2016 from Rs 1324 crore at end December 2015. The share of zero balances account has declined to only 8%.
Bank added new 67 branches and 579 ATMs in the quarter ended March 2016, pushing up the branch network to 6759 branches and ATMs network to 9463 ATMs at end March 2016.
The employee count of the bank stood at 70000 employees, while the customer base of the bank has improved to 9.5 crore at end March 2016.
Bank has improved the cost-to-income ratio to 44.9% in FY2016 from 46.7% in FY2015.