Punjab National Bank (PNB) is expecting recoveries from bad loans to double the slippages amount in the next financial year. The higher recovery target comes amid encouraging recoveries made by the lender in the current fiscal.
The bank managed to recover Rs 15,881 crore from bad loans for the first nine months of FY24, which is over three times of slippages. Total slippages were at Rs 4,551 crore during the period. “For the next financial year, we will set a target that whatever will be the slippages, recovery should be double that amount because we are having so much of stock – Rs 60,000 crore is gross NPA,” said Atul Kumar Goel, MD and CEO, in an earnings call.
In the third quarter also, the recovery was higher than slippages, he added. Total slippages in Q3 stood at Rs 1,793 crore while recoveries were at Rs 6,387 crore. Goel said the bank has taken various measures to boost its recovery, and is not entirely depending on the National Company Law Tribunal (NCLT) for the same.
“Recovery from the NCLT is just one-third of total recoveries. Out of Rs 6,387 crore which we recovered in the December quarter, the recovery from the NCLT was only Rs 1,831 crore,” Goel said.
The bank maintained the trend of higher recovery in the second quarter as well. It recovered Rs 5,533 crore in the July-September period while slippages stood at Rs 1,826 crore.
Apart from boosting its recovery, the lender has also been able to improve its asset quality. Its gross non-performing assets (GNPA) ratio improved by 352 bps year-on-year to 6.24% as on December 2023, from 9.76% in the year-ago period. The NNPA ratio improved by 234 bps on a YoY basis to 0.96% from 3.30%. Gross NPAs stood at Rs 60,371 crore, against Rs 65,563.1 crore in the previous quarter, while net NPAs came in at Rs 8,815.8 crore, compared with Rs 13,114 crore.