August8 , 2022

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

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“The year-on-year growth in credit is more than 10%,” says Atul Kumar Goel, MD & CEO,

Talk to us about the other income in the quarter gone by because we have seen an uptick on a quarter-on-quarter basis. Could you tell us how the treasury book fared for you in this quarter?
Other income includes two types of income; one is the fee- based and other is the treasury income. There is a growth in fee-based income of around 34% on a year-to-year basis. As for the treasury income, last year, in treasury income, there was a profit of Rs 1,180 crore which was reduced in the current quarter to the extent of Rs 573 crore. It means there is a gap of around Rs 600 crore in treasury income year on year.

In addition to that, there was a mark-to-market hit of around Rs 1,409 crore on account of increase in the interest rate in the current quarter as against a reversal of Rs 309 crore in June, 2021. If one adds the impact of the treasury income, there was Rs 600 crore treasury profit and Rs 1,700 crore total hit. So, Rs 1,700 crore plus Rs 600 crore is coming to Rs 2300.

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I am looking at the asset quality, GNPAs have come in at 11.27%. That is an improvement on a sequential basis and net NPAs have fallen to about 4.28%. But provisions still remain elevated. Was any major account provided for and could you give guidance on credit cost for the rest of the financial year?
As far as our slippage is concerned, last quarter also, there was no big lumpy account in our bank which we had to recognise. All the big accounts have been recognised. In the current quarter, slippage from agri was around Rs 2,310 crore, MSMEs Rs 1,606 crore and retail Rs 826 crore. Other was Rs 525 crore, out of which one account was around Rs 423 crore. It was downgraded in the June quarter and we have recovered the entire amount in July itself.

So slippage is coming only from the RAM sector and we have taken a lot of initiatives in the last two years for improving the collection efficiency as well as the underwriting standards. In the last two years, we have made the analysis of our portfolio of the RAM of around Rs 1 lakh crore including the corporate. In the last two years, the slippage has been only 0.59%. As far as guidance is concerned, my credit cost is around 2.46% for this quarter. We will try to reduce this credit cost by 2 to 2.25%.

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Your advance growth in the quarter gone by has been extremely strong. Could you tell us which sectors are actually seeing the traction and which sectors are you as a bank targeting?
The year-on-year growth in credit is more than 10%. A further break up of this shows, 10.21% of the growth was in retail and 11% as far as housing is concerned. The growth in agriculture and SME was less than 10%. There was good growth in the corporate side.

From the corporate side, there is a good demand in NBFCs also. We have taken a good exposure in the NBFCs and I am happy to share that of around Rs1 lakh crore NBFC share, 95% is A and above rated. The other demand is coming from civil supplies. Other demand is coming from the ethanol projects and the road project as well as the health sector.

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