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Event Details • Date: July 27, 2024 • Moderator: Mr. Nitin Tiwari, Elara Securities • Participants: Senior management team including MD & CEO Mr. Atul Kumar Goel • Format: Listen-only mode with a Q&A session
Financial Highlights • Total Business: Rs. 24.39 trillion (10% YoY increase) • Deposits: Rs. 14.08 trillion (8.5% growth) • Gross Credit: Rs. 10.28 trillion (12.2% increase) • Net Profit: Rs. 3,252 crores (159% increase, highest in four years) • Asset Quality: • Gross NPA decreased from Rs. 70,899 crores to Rs. 51,263 crores • Gross NPA ratio: 4.98% (target revised to 4%) • Capital Ratios: Tier-1 capital ratio at 10.95% • Cost-to-Income Ratio: Improved to 53.28% • Lowest Slippage: Rs. 1,755 crores in 12 quarters
Operational Updates • Account Openings: Over 1 crore accounts last year; 27 lakh in the current quarter • NCLT Recoveries: Applied for 813 accounts totaling Rs. 1,04,383 crores; total recoveries last year: Rs. 3,603 crores • Credit Growth Guidance: 11% to 12%
Q&A Session Insights • Credit and Deposit Levels: Strong deposit base with a credit-deposit ratio of 73% • Liquidity Coverage Ratio (LCR): Current LCR at 125%, expected to reduce to 115% • Investment Yields: Increased from 6.82% to 7.06% • Digital Transformation: Rs. 2,800 crores allocated for IT expenditure; over 100 products revised • Operating Expenses: One-time expense of Rs. 558 crores inflated OPEX figures
Asset Quality and Recovery • SMA Figures: SMA-0 at Rs. 77,952 crores; stable SMA-1 and SMA-2 • Expected Recoveries: Anticipated Rs. 18,000 crores, including Rs. 3,000 crores from corporate accounts under NCLT • Focus Areas: Retail, agriculture, MSME sectors, and green energy financing
Conclusion • Future Outlook: Positive performance anticipated with strong recovery and growth potential • Stakeholder Support: Expression of gratitude for continued support from stakeholders
Opening Remarks • Led by Managing Director and CEO Shri Atul Kumar Goel. • Disclaimer on statements regarding future performance and risks. • Encouragement for independent verification of information.
Financial Performance Highlights • Quarterly Results: • Net profit of ₹3,010 crores for Q4. • Annual net profit of ₹8,245 crores, a 228.8% increase. • Growth Metrics: • 10% growth in net interest income (NII) and operating profit. • Gross non-performing assets (GNPA) decreased to 5.73%. • Gross business reached ₹23.53 trillion (deposits: ₹13.69 trillion, advances: ₹9.83 trillion). • Capital Adequacy: • Improved to 15.97%. • Cost of credit reduced to 0.81%.
Loan and Deposit Insights • Increase in existing loans by ₹2,206 crores. • Interest rate composition: MCLR at 35%, repo at 40%, fixed rates at 9%. • Strong underwriting standards and collection efficiency noted.
Recovery and Provisions • Significant NCLT recoveries: ₹3,603 crores last year, expected ₹3,000-3,200 crores next year. • Board approval to raise ₹17,500 crores in capital through QIP and bonds.
Management Responses to Analyst Queries • Provisioning Requirements: • RBI's draft circular discussed; bank prepared for new requirements. • Loan-to-Deposit Ratio (LDR): • Target to increase LDR to 75%. • Future Loan Demand: • Strong interest in retail, infrastructure, and corporate sectors.
Slippages and Dividend • Increase in slippages from ₹1,793 crore in Q3 to ₹2,206 crore in Q4. • Dividend set at 75% (₹1.5 per share), up from 32.5% the previous year.
Operating Expenses and Strategic Outlook • Projected wage revision of ₹3,500 to ₹3,600 crores. • Focus on retail and MSME lending, with a credit growth guidance of 11% to 12%.
Closing Remarks • Goel expressed gratitude and confidence in the bank's strategies. • Aiming for a return on assets (ROA) of 1% by FY 2024-25. • Encouraged further inquiries through the Investor Relations department.
Punjab National Bank Earnings Call Summary (Q3 FY 2024)
Call Details • Date: January 25, 2024 • Host: Emkay Global Financial Services • Key Executives: • Atul Kumar Goel (Managing Director & CEO) • Executive Directors
Financial Highlights • Business Growth: • Year-on-year growth of 10.82% (INR 2,29,074 crores) • Deposits: • Grew by 9.35% to INR 13.23 lakh crore • Advances: • Increased by 12.90% to INR 9.67 trillion • Net Interest Income: • Rose by 12.14% to INR 10,293 crore • Operating Profit: • Increased by 10.77% to INR 6,331 crore • Net Profit: • Surged 253.39% to INR 2,223 crore (highest in 15 quarters)
Asset Quality • Gross NPA: • Decreased from 9.76% to 6.24% • Net NPA: • Reduced from 3.3% to 0.96% • Provision Coverage Ratio: • Increased to 94% • Credit Costs: • Stable with slippages reduced to 0.81%
Financial Ratios • Cost of Deposits: • Increased to 4.96% • Yield on Advances: • Improved to 8.54% • Cost-to-Income Ratio: • Declined to 51.18% • Net Interest Margins: • Reported at 3.30% domestically
Recovery and Provisions • Recovery Target: • On track for INR 22,000 crore, with INR 17,000 crore already recovered • Wage Revision Provisions: • Increased from INR 694 crore to INR 800 crore • Pension Liabilities: • AS-15 provision reduced from INR 1,330 crore to INR 332 crore
Analyst Inquiries • Credit Cost Guidance: • Projected around 1% for FY 2024-2025 • Tax Rate: • Above 35%, consulting on transition to new tax regime • NCLT Recoveries: • Focus on maximizing recoveries through legal avenues
Strategic Insights • Loan Growth Projections: • Corporate loan growth expected at 12-13% • Retail Lending: • Strong growth in housing and vehicle loans • Treasury Outlook: • Stable funding costs anticipated
Closing Remarks • Performance Consistency: • Improvements in business growth, profitability, and asset quality over seven quarters • Future Focus: • Recovery strategies, reducing slippage, enhancing CASA, and digital initiatives • HR Transformation: • Set for completion by March 2024
Conclusion • Confidence in Trajectory: • Anticipated positive results in upcoming quarters.
Opening Remarks • Led by Managing Director and CEO Atul Kumar Goel. • Emphasis on the risks and uncertainties in forward-looking statements. • Aim to provide insights into financial performance and engage with analysts.
Financial Performance Highlights • Strong Results: Highest net interest income, operating profit, and net profit in 14 quarters. • Growth Metrics: • Gross business growth: 11.26% • Deposits: Increased by 9.7% • Gross advances: Increased by 13.43% • Profitability: • Net interest income: Rs. 9,923 crores (20% rise) • Net profit: Rs. 1,756 crores (327.35% surge) • Asset Quality: • Gross NPA reduced from Rs. 87,000 crores to Rs. 65,000 crores. • Gross NPA ratio improved to 6.96%. • Provision coverage ratio (PCR): 91.91%.
Capital Raising Plans • Board approval to raise Rs. 12,000 crores in the current financial year. • Rs. 7,000 crores for AT-I and Rs. 5,000 crores for Tier-II. • Rs. 3,090 crores already raised in Q1. • Capital adequacy ratio: 15.09%.
Q&A Session Insights • Return on Assets (ROA): Currently at 0.46%, target of 1% by FY 2024-25. • Subsidiaries: No plans for monetization; all performing well, especially PNB Housing Finance. • Credit Costs and Slippages: Positive trends in reducing both; improved underwriting standards noted. • Employee Expenses: Adequate provisions made for wage revisions.
Additional Financial Metrics • 15% of deposits (approx. Rs. 1 lakh crores) yet to be repriced. • Cost of deposits: 4.84%. • Interest income from NPA recoveries: Rs. 500 crores quarterly.
Loan Book and Treasury Outlook • Overseas loan book: Rs. 35,000-36,000 crores (9.9% growth). • Treasury income: Rs. 136 crores; focus on advancing loans for better results. • Slippage data indicates balanced distribution across segments.
Closing Remarks • Confidence in reducing NPAs and achieving a target of 1% ROA by FY 2024-25. • Acknowledgment of digital and HR transformations contributing to improved performance.