Punjab National Bank Housing Finance saw a sharp increase in their GNPA at 6 percent versus 4.4 percent quarter-on-quarter and net NPAs rose to 3.61 percent versus 2.43 percent QoQ. The Calculated Provision Coverage Ratio was up at 74.5 percent versus 45.2 percent QoQ.
CNBC-TV18 spoke with Hardayal Prasad, MD and CEO, PNB Housing Finance, to discuss the numbers and the outlook in detail. He said, “I agree with you that there has been a sharp increase in NPAs in this quarter. The reason is that for 45 days, there was a lockdown and, on top of it, most of the courts and high courts across the states, they have very clearly indicated that there cannot be any action, either on the legal side or the administrative side, those actions cannot be taken and that resulted into a little bit of problems in terms of the recovery.”
“We would like to reiterate, and we'd like to bring to your attention that we have a strong expertise in self-employed segment and this COVID second wave that hit India very badly, affected the businesses closely, people lost their lives and businesses were completely wiped off. And that was one of the reasons why our stresses improved to some to some extent,” he added.
However, if one were to look at the way we have rebounded and there are two very, very significant things that have happened. One is in July, the recovery proficiency or the collection efficiencies have gone back to a level of almost 98 percent. That's a very, very good sign, the collection efficiencies are returning after the COVID phase.
“The second thing is that the kind of resolutions that we have done, which were just from the morat book. And we had indicated in our last earnings call, that it is a morat book, which might experience settlement out of stresses. In that morat book of stage one and stage two, we have done a huge amount of resolutions, which would mean that there is forward flows are not going to happen.”
“So there has been an increase, we have pulled back to significant amount in July. And going forward, we feel that with courts opening up and allowing recovery proceedings to go ahead after 31st of August, we might see a strong rebound in terms of the way the collection will work and the way we will initiate actions that are possible to go on for a recovery. So I think we're quite confident that we should be in a position to pull back our NPAs to a level which is acceptable keeping in view the economic slowdown and economic hardships that people are undergoing,” said Prasad.
On disbursements, Prasad said, “If you look at the disbursements, and I will take you back to the Q4FY20. We did very, very strong disbursement of almost Rs 4,000 crore and we expected it to continue. If you go back FY20, you would recall that we have very clearly indicated that we are going to exit and scale down our operations on the corporate book.”
“So the total disbursement that you'll see this quarter is purely driven by the retail, 94% of the disbursement that have come and we have had only 45 days. Going forward, it is critical that as a retail focused company, we will continue to push the retail business that we do we have expertise in self-employed and salaried which we can continue to leverage.”
On the morat book, he said, “We had almost about Rs 17,000 crore of morat book, but in terms of restructuring and especially the you know the one and two RBI one and two if you look at it, we had almost about Rs 1,700 crore of the restructuring that we had done,”
For the entire interview, watch video