Punjab & Sind Bank expects Rs 1,100 crore profit in FY'23 amid bad loans resolution

NEW DELHI: State-owned Punjab & Sind Bank expects to clock a net profit of around Rs 1,100 crore in the current financial year on the back of resolution of bad loans.

The bank has given a NPA recovery guidance of Rs 2,000 crore for the ongoing fiscal, Punjab & Sind Bank Managing Director Swarup Kumar Saha told PTI in an interaction.

Out of this, Rs 700 crore has already been realised, he said, adding some big resolutions like Sintex Industries and Meenakshi Energy are going to happen in the coming quarter.

Besides, he said, resolution of some IL&FS group accounts is expected during the current fiscal.

Helped by strong recoveries, he said, "we are looking at profitability of Rs 1,100-1,200 crore in FY'23."

During the first half of the fiscal, the bank earned a profit of Rs 483 crore as against Rs 392 crore in the same period a year ago.

The bank had gone through rough patches but it was able to make a historic turnaround and recorded an annual profit of Rs 1,039 crore in FY22 -- the highest in the 114-year history of the lender.

Saha also said the bank would take a call on raising equity capital through qualified institutional placement (QIP) after taking into account third quarter numbers and pace of loan growth.

As far as capital adequacy ratio is concerned, the bank is well capitalised at 15.68 per cent and it can easily take care of business growth this year, he added.

The Government of India's holding in the bank stood at 98.25 per cent at the end of September 2022. If the bank raises capital through share sale, the government's holding would decline depending on the quantum.

During the previous two years (2020-21 and 2021-22), the government infused Rs 5,500 crore and Rs 4,600 crore in Punjab & Sind Bank through non-interest bearing recapitalisation bonds.

On loan growth, Saha said the bank is targeting a 15 per cent rise during FY23 and the current capital base can easily support this.

The Delhi-based lender has shifted its focus to the retail, agriculture and MSME (RAM) segment to de-risk its balance sheet. Corporate segment lending grew by a muted 2.5 per cent in Q2 FY23, while retail lending improved by 16 per cent on an annual basis.

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