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00:00All right, it's results season and as we wind down towards the end of the quarterly numbers,
00:05one important set of numbers to look at is Punjab National Bank.
00:09Now the PSU player has been a darling of the markets for most of this year and has put
00:17out a fairly decent set of numbers.
00:20Atul Kumar Goyal is joining us.
00:22He's the MD and CEO.
00:23Mr. Goyal, thank you for speaking with us here at NDTV Profit.
00:28Let's just first begin by understanding the numbers.
00:31Now the PAT looks very robust, up about 160%.
00:36Your operating profits have also moved up 9% year-on-year, 1% Q-on-Q, net interest income
00:42is also up.
00:44But credit growth while growing at about 12% is slightly below target.
00:53What would be your take on the overall numbers and on credit growth?
00:57Very good morning, Tamanna ji.
01:00As far as profitability is concerned, definitely there is an increase of more than 160% in
01:06the profit.
01:07The profit increases on account of the so many factors, but major factor is the contribution
01:14of the reduction in the credit cost.
01:16Credit cost for the last quarter has reduced to 0.80% and the credit cost for all over
01:22the year was 1.40%.
01:25Since we have already improved our PCR to the 95%, so we are giving the guidance for
01:31the next year, it will be below 1%, so profitability is bound to increase every quarter by quarter
01:36in the times to come.
01:37Your specific question regarding the credit growth, definitely it is little less whatever
01:42the guidance we have given 12% to 13%, it was 11.4%.
01:47If you see the credit growth in the June quarter, September quarter and the December
01:52quarter, it was more than 13%, but why it has reduced on account of, because if you
01:57see the last quarter of the last financial year, March 23 quarter, there was some bulk
02:02business we have done, so this was the reason and we are giving the guidance for the next
02:06financial year, the credit growth will remain within the range of the 11% to 12%.
02:11And so 11% to 12% is your outlook for credit growth next financial year.
02:16What about deposit growth?
02:17Even that was slightly under the estimates that were given.
02:22Deposit growth, we are giving the target around 9% to 10% for the current financial year 2024-25.
02:30The reason was less of the deposit growth, if you see my CDO ratio is around 71%, so
02:39there was no need for taking the bulk deposit, so we have resorted ourselves not to take
02:43any bulk deposit even as on date.
02:45We are having the excess SLR, more than 1 lakh crore available to us, so this was the
02:51reason, otherwise if you see the CASA, CASA was 41.40% and last year we have opened more
02:57than 1 crore CVMA account and 2.68 lakh current account where money will flow, so on account
03:03of this we are targeting our CASA ratio should be around 42% in the current financial year.
03:10I just want to come to the point of recoveries, recoveries have been robust, NPAs have also
03:18been coming down, but what is your outlook to the pace of recovery, sir?
03:23The pace of recovery will remain very good in the current financial year also because
03:29we are having around 90,000 crore rupees TW book and around 55 crore rupees of the gross
03:35NPA book.
03:36If you see the last year, our recovery was 3 times of the addition also, so 5.73 we have
03:43achieved for the gross NPA number and the guidance for the current financial year is
03:47less than 5%, similarly the net NPA has been achieved to the range of 0.73%, the target
03:56of the net NPA is less than 50% in the financial year 2024 and since our PCR is improved to
04:05the 95%, so credit cost as I told earlier also we are giving the guidance less than
04:101%.
04:11Okay, Goyalji let me come to I would say the biggest topic right now for the banking space
04:18and for you as well which is the RBI draft guidelines on project financing.
04:23Now you have said publicly there is no need to panic, but there is a need for discipline
04:28in the space.
04:29Now before I come to you and ask you, you know why you have said that, what do you mean,
04:33I want to understand what is the share of project financing, how much of this category
04:39is on the balance sheet right now?
04:43My reply to this is the first is a draft guidelines, we should wait for the final guidelines also
04:50because this guidelines has been issued by the regulator on the 3rd of the May, it is
04:54a like a consultative approach and they have asked the comment from each and every stakeholder
05:01whether it will be a bank and it will be a promoter side also or the corporate side
05:06also.
05:07So let us wait for the final guidelines and one thing I can assure all of you that what
05:12will be the final guidelines, there should not be any worry for the Punjab Raja Bank
05:16because today our balance sheet is very strong, but some clarification is also required because
05:22you are asking what will be the, which type of the loan book you are having because as
05:27per the draft guidelines, it is applicable to all type of the project financing, the
05:32infra as well as the non-infra without any limit also, so we will take the clarification
05:37whether there is a need of fix any limit etc also, so I think there should not be a matter
05:43of worry about what will be the final guidelines, we should wait for them, we will be in a position
05:47to provide that.
05:48Now, so what I want to understand is as of today, as per the definitions in the guidelines
05:55and I understand completely well these are not final, so with that caveat, as of today
06:00how much of your loan mix will come under these categories sir of project financing
06:05which would be subjected to higher provisions if these draft guidelines go through, so I
06:11have put all the ifs and buts, but having said that how much of the loan book right
06:16now would be vulnerable to this?
06:19That will not be a too much of the impact because sometime of the loan in the loan book
06:26the infra, where we have given the corporate loan that will be the out of the, this part
06:31although it is coming under the category of the infra, similarly I would like to tell
06:35you also some of the discounting of the annuity from the NHI, although it will come in the
06:40book of the, book of the infra, but that will not come under the guidelines, so in my opinion
06:48rough estimate is like that, whatever our infra book is there, only 50% of debt will
06:54be come under this category.