The state-run lender Punjab National Bank (PNB) on Tuesday said the bank is confident that its performance will be better in the fourth quarter and expects a reduction in net non-performing assets (NPAs).
The bank on Tuesday reported a standalone net loss of Rs 492.28 crore for December quarter 2019-20 due to substantial increase in bad loan provisioning. The bank had posted a net profit of Rs 246.51 crore for the same period a year ago. In the previous September quarter, the bank had a profit of Rs 507.05 crore.
In an interview to CNBC-TV18, SS Mallikarjuna Rao, managing director and chief executive officer, said, "Out of Rs 6,700 crore, Rs 2,100 crore has come from agriculture and Rs 1,400 crore from MSME. Only Rs 3,000 crore belongs to others and out of that, DHFL contributes around Rs 1,189 crore."
Coming to the telecom sector, he said, "We have an exposure of around Rs 1,000 crore only in Vodafone and we don’t have any exposure in Bharti Airtel. So there are no new accounts identified in this quarter related to telecom. We have identified Jet Airways and DHFL, where we have done provisioning to the extent of 30 percent. We are expected to increase further provision up to March in those accounts depending upon the resolution position."
On credit cost guidance, he further mentioned, “Credit cost for the nine months stood at 2.59 and we are expecting it to remain around 2.5-2.55 percent for March 2020. This will get moderated only in the next financial year, it could be around 2 percent. 2021, it will be an amalgamated entity. At the point of time, we will review the position in Q1."
“PNB has a good amount of liquidity. However, liquidity is being available in the market, there is tremendous pressure on the interest rates. With PNB, the line of credit currently remains around Rs 50,000 crore, which is yet to be utilised because of the pricing in the market is very competitive," he added.
Speaking about resolution process, he said, "In Q4, the bank has lined a resolution in National Company Law Tribunal to the extent of Rs 8,800 crore of which the recovery expected is roughly around Rs 3,000 crore. Provision has been done to the extent of 92 percent. As a result, Rs 1,400 crore will be the write-back which is expected to be there."