pnb: Atul Kumar Goel on PNB result, slippages and way forward

He says: the annual credit growth is more than 10% Atul Kumar Goeldoctor and CEO,

Talk to us about other revenues last quarter because we’ve seen a quarter-over-quarter increase. Can you tell us how the treasury book was for you this quarter?
Other income includes two types of income. One is based on fees and the other is treasury income. Fee-based revenue growth is around 34% year-on-year. Regarding treasury income, last year, treasury income was 1180 million rials, which has decreased by 573 crores in the current quarter. This means there is a gap of around Rs 600 crore in exchequer revenue every year.

In addition, around Rs 1,409 crore was sold from the market in the current quarter, as against a decline of Rs 309 crore in June 2021 due to the rise in interest rates. Exchequer revenue, 600 crore exchequer interest and 1700 crore total have been hit. So, 1700 crores plus 600 crores comes to Rs 2300 crores.

I look at asset quality, GNPAs are 11.27%. This is an improvement on sequential basis and net NPAs have come down to around 4.28%. But regulations are still high. Was it a major account and can you advise on the cost of credit for the rest of the financial year?
As far as our slippage is concerned, last quarter as well, there were no large bloated accounts in our bank that we had to identify. All major accounts have been identified. In the current quarter, the slippage from the agriculture sector was around Rs 2,310 crore, small and medium enterprises Rs 1,606 crore and retail Rs 826 crore. Another was 525 crores, of which one account was about 423 crores. It was reduced in the June quarter and we recovered the entire amount in July.

So the slippage is only from the RAM segment and we have taken many initiatives in the last two years to improve the efficiency of the collection as well as the underwriting standards. In the last two years, we have analyzed a portfolio of RAMs of around Rs 1 crore including companies. In the last two years, the slippage was only 0.59%. As far as guidance goes, my cost of credit for this quarter is around 2.46%. We will try to reduce this credit cost by 2-2.25%.

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Your forward growth has been very strong this past quarter. Can you tell us which sectors are really seeing traction and which sectors are you targeting as a bank?
The annual credit growth is more than 10%. A further breakdown shows that 10.21% of the growth was in retail sales and 11% in housing. Growth in agriculture and SME sector was less than 10%. There was good growth in the corporate sector.

On the corporate side, there is good demand in NBFCs as well. We have good exposure in NBFCs and I am happy to share NBFC share of around Rs 1 Lakh Crore, 95% are A rated and above. Another demand is related to construction supplies. Another demand is from ethanol projects and road projects as well as the health sector.


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