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NPAs worth Rs 11,000 crore to be resolved in the second half of FY20, says PNB

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Punjab National Bank (PNB) reported a weak set of Q2FY20 numbers with their asset quality woes continuing. SS Mallikarjuna Rao, MD and CEO of the bank discussed this and the outlook going ahead.

Punjab National Bank (PNB) reported a weak set of Q2FY20 numbers. The lender reported a net profit of Rs 507.10 crore in the second quarter ended September along with a deterioration in asset quality.
The bank is looking at some of the stressed accounts, which may slip during the second half of the financial year, and simultaneously concentrating on recoveries.
"We expect Rs 24,000 crore of recovery and deduction during the entire year. In the first half of the financial year, the recovery and deduction have been around Rs 6,000-7,000 crore,” SS Mallikarjuna Rao, MD and CEO of the bank, said.
Commenting on gross non-performing assets (NPAs), he stated: “We are expecting around Rs 11,000 crore to be resolved during the second half of the year. This includes Essar and Bhushan – for these two, our exposure is around Rs 5,700 crore. Once the resolution takes place, gross NPA is expected to go down drastically.”
The bank's exposure to non-banking financial companies (NBFCs) is Rs 44,000 crore. Out of this, the exposure to the triple B and below-ranked companies is Rs 2,200 crore.
“Operating profit will increase between 10 and 12 percent and slippage overall for a year can be at Rs 19,000 crore. Also the provisions, which are required to be made, which are deferred in terms of the fraud accounts in terms of the Reserve Bank of India circular, will be definitely undertaken,” he added.
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