New Delhi : On top of the challenges of the last two pandemic years, Punjab National Bank (PNB) also had to grapple with the amalgamation of two state-run banks. Nevertheless, the public sector lender has posted profits, maintained its CASA share, and also improved its capital adequacy and asset quality, Managing Director and CEO Atul Kumar Goel said in an email interview. Edited part.
How has the Bank performed so far and what is the outlook for the current financial year?
The last two years were challenging, the pandemic hit all economic sectors and the amalgamation left a lasting impact on us. We have done well under such conditions. We have strengthened our processes, created verticals for better operational efficiencies, worked on our underwriting standards and are able to infuse more equity through the markets. While we remain cautiously optimistic for this fiscal year – cautiously as we address challenges the way the global economy is facing adversity – this year our focus will be on quality growth with profitability. In the first quarter of this fiscal year, we were able to cross 8 trillion in global advances, which grew 10% year over year. Our NPAs went down sequentially and yearly. NIM grew by five basis points to 2.79% in Q1 FY2023.
I expect the subsequent quarters to be better. With various factors driving this growth, the credit demand outlook is positive. Strong economic growth, revival in the corporate segment, supportive plans for the MSME segment, and strong consumer sentiments will all aid double-digit credit growth. We are envisaging 11%-12% growth in our advances.
Which segments are driving credit growth, and how does the bank plan to meet the funding requirements for the growing segments?
In my opinion, economic growth, increase in government and private capital expenditure, expansion of Production Linked Incentive (PLI) scheme and various other schemes for MSME sector will boost credit growth. The infrastructure sector will get the requisite thrust through various government reform measures under 145 trillion plus national infrastructure pipeline and PM Gati Shakti. Retail sector will grow with better consumer demand. With climate emerging as a challenge, the focus is now on developing clean and green economies, and we expect renewable energy to be another area with huge potential. Our low cost CASA (Current and Savings Account) deposit has been our specialty. We have increased our deposit rates in line with the economic scenario and have also come up with various new campaigns and schemes to expand our deposit base.
What is the focus of the bank for the next few years?
Our medium- and long-term strategy is focused on the three pillars of asset quality, accelerating growth and improving profitability. Improved customer experience and transformative operations will be the key enablers to support the above objectives. For asset quality, we plan to increase the use of call centers as a major channel to increase collections.
We also intend to leverage digital tools to improve ease of payment and digitize recovery processes. The growth will accelerate with focused growth in RAM (Retail, Agriculture and · MSME) segment and digitization of on-boarding and credit journey of customers. Profitability will be improved by increasing the offerings of fee-based income and wealth management and through rationalization of costs. We are also investing in an all-channel customer experience platform. We are working on launching our super-app solution through our mobile application, PNB One, where not only banking products and services but also lifestyle services and marketplace options will be available.
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