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Analyst Meet / AGM - Analyst Meet

Targets loan growth of 12%, expects to maintain NIMs at 2.3-2.5% for FY2018

Punjab National Bank

22-May-2017, 07:05
Punjab National Bank conducted an analyst meet on 19 May 2017 to discuss the financial performance of bank for the quarter ended March 2017 and the prospects of the bank. Sunil Mehta - MD&CEO addressed the meet:
Highlights:

The bank has maintained healthy growth in its operating profit, while posting 28% increase in the operating profit for FY2017. The bank has substantially improved cost-to-income ratio to 41.57%, excluding the positive impact of one-off items, in FY2017 from 46.79% in FY2016. The bank is cost-to-income ratio of 47%-47% for FY2017.
On business front, the bank has recorded 8% growth in business, while improving CASA deposit ratio to 46% from 41.6% in FY2017.
The bank has strong distribution network of 6937 branches and 10681 branches end March 2017. The share of alternate channels in overall transaction has increased to 54% end March 2017.
The bank has achieved priority sector loan targets for sub-segments in FY2017.
The bank is targeting overall loan book growth of 12% with retail loan book growth at 20% in FY2018.
The bank has tied up with the Post Payment Bank for origination of lending leads from their customers.
The bank expects to maintain margins stable in the range of 2.3%-2.5% in FY2018.
On asset quality front, the bank has maintained asset quality stable with sustained cash recovery and upgradation performance. The bank has substantially improved provision coverage ratio to 58.6% end March 2017 from 51.1% end March 2016.
The bank has reduced GNPA as well as NNPA in percentage as well as absolute terms in FY2017.
The fresh slippages of loans stood at Rs 6896 crore, while cash recoveries were Rs 2084 crore, upgrades Rs 2263 crore and write-offs Rs 1500 crore.
The bank has conducted sale assets to asset reconstruction companies (ARCs) worth Rs 1100 crore in Q4FY2017 and Rs 2892 crore in FY2017.
The securities receipts book of the bank stood at Rs 1830 crore end March 2017.
The total provision on top 50 NPA accounts was more than the overall PCR of 58.6% end March 2017.
The bank's exposure SDR/S4A/5-25 scheme stood at Rs 18000 crore, of which about Rs 6000 crore of loans are already classified as NPA or restructured loans.
The SMA-2 loan book of the bank stood at Rs 9500 crore end March 2017.
The NPA divergence for the bank in line with RBI guidelines was at Rs 200 crore in FY2016.
The bank proposes to enhance focus on strengthening of asset quality war room, prompt asset quality monitoring and incentivisation for recovery of loans.
The bank expects fresh slippages to decline, while sees credit costs to be limited to 2% in FY2018.
The bank has identified non-core assets from sale, while proposes to undertake cost-benefit analysis before any sale decision.
The key strategy of the bank includes strengthening of credit monitoring and recovery, profitability analysis of all verticals and rebalancing of asset portfolio.