PNB's Strategic Vision: Interest Rates, Funding, and Future Growth

PNB's MD Atul Kumar Goel expects a reversal in interest rates by year's end. The bank aims to increase its Retail, Agriculture, and MSME portfolio to 60% in the next four to five years. PNB's FY24 profits grew by 229%, with plans to raise Rs 17,500 crore in capital for further growth.

PTI | New Delhi | Updated: 03-06-2024 15:59 IST | Created: 03-06-2024 15:59 IST
PNB's Strategic Vision: Interest Rates, Funding, and Future Growth
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In a recent statement ahead of RBI's monetary policy, Punjab National Bank (PNB) Managing Director Atul Kumar Goel announced that interest rates have likely peaked and may see a decline by the end of this year.

The Monetary Policy Committee, expected to keep the policy rate unchanged for the eighth consecutive meeting, will convene on June 5 with the decision to be revealed on June 7.

"Interest rates are influenced by various factors such as growth, inflation, and the monetary policies of other nations. I believe rates have peaked and could reduce by year-end," Goel told PTI.

Additionally, Goel noted that 95% of deposits have already been repriced, eliminating the need for significant increases in deposit rates.

PNB's focus will remain on the Retail, Agriculture, and MSME (RAM) segment, which currently comprises 55% of total credit. The bank aims to boost this to 60% within the next four to five years, setting a 57% target for this year alone.

Although prioritizing RAM, Goel emphasized that the bank wouldn't hesitate to finance profitable corporate loans, specifically citing demand from infrastructure projects and sectors like steel and renewable energy.

On its financial health, PNB recorded a 229% growth in profit for FY24, leading among 12 public sector banks.

To enhance profitability, PNB will target expanding its RAM portfolio, extending quality corporate loans, controlling slippages, improving recovery rates, boosting forex income, and increasing fee income through third-party product sales.

Increasing CASA (Current Account Savings Account) percentages and maintaining credit costs below 1% are also part of PNB's strategy. Their goal is to enhance the Return on Assets (ROA) to 0.8% this year and 1% by March 2025, significantly increasing profit.

For the current financial year, Goel anticipates 11-12% credit growth and 9-10% deposit growth. PNB plans to raise Rs 17,500 crore through Tier I and Tier II bonds and private share placements, having already raised Rs 10,000 crore in FY24 at competitive rates.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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