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Analyst Meet / AGM - Analyst Meet

Targets loan growth of 10-12% for FY2017

Punjab National Bank

30-Jul-2016, 11:18
Punjab National Bank conducted an analyst meet on 29 July 2016 to discuss the financial performance of bank for the quarter ended June 2016 and the prospects of the bank. Usha Ananthasubramanian - MD&CEO addressed the meet:

Highlights:

. Bank has continued to maintain Casa ratio above 40%. The bulk deposits are down to the negligible level of 0.12% of total deposits at end June 2016.

. On advances front, the bank has continued to raise the share of small ticket loans to 58.9%

. The core operating performance of the bank remains stable, with consistent growth in operating profit. The expense ratio of the bank remains under control.

. Bank is focusing intensively on NPA recovery. Bank has posted strong recovery and upgradations of Rs 6000 crore in the quarter ended June 2016.

. Recoveries in written off accounts was also strong at Rs 727 crore in the quarter ended June 2016. Bank has targeted the recoveries in written off accounts at Rs 3000 crore for FY2017.

. Bank is witnessing strong improvement in ground level recoveries. Bank is targeting heavy recoveries and upgradations of Rs 20000 crore for FY2017. The recoveries werw at Rs 1500 crore in the first 25 days of July 2016.

. Bank is also considering sales of assets to asset reconstruction companies going ahead.

. As regard to NPA ratio, increase is mainly on account of denominator effect, as bank has witnessed decline in its loan book due to seasonally weak quarter.

. Implementation of 7th pay commission pay hike recommendation, better monsoon rainfall in 2016, festive season is expected to help credit growth to pick up the rest of the financial year. Bank is targeting loan growth of 10 to 12% for FY2017.

. Bank has recorded strong growth in trading income to Rs 600 crore in Q1FY2017. The trading income performance is expected to be sustained with strong trading income of Rs 156 crore in the first 25 days of July 2016.

. Fresh slippage of advances to NPA category was elevated at Rs 9227 crore in Q1FY2017., while NPA reductions (though recoveries, upgradations and write-offs) were strong at Rs 8391 crore during Q1FY2017.

. The portion of fresh slippages at around Rs 1700 crore was also contributed by LC devolvement in Q1. As per the bank, most of the LC devolvement has already taken place and do not expect any significant LC devolvement, going forward.

. The account sleeping to NPA category with exposure of above Rs 100 crore amounted to Rs 3107 cross, while account with exposure below Rs 100 crore amounted to Rs 2902 crore in the quarter ended June 2016

. The fresh slippages of around Rs 1524 crore were contributed by the restructured advance book.

. The watchlist account list of the bank stands at Rs 4000 crore.

. Bank received Rs 1600 crore of UDAY bonds in Q1, which were sold in the market for cash.

. As of September 2015, the bank had exposure to Rs 10000 crore discom loans, of which Rs 5300 crore of discom loans are converted into bonds.

. Under structured advanced category, the exposure to Tamil Nadu State Electricity Board stands at Rs 1800 crore, which would be converted to bonds once the state joins the UDAY scheme.

. The conversion of discom loans to bonds has contributed 20 bps of capital adequacy ratio improvement.