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Punjab National Bank - Focus On A Stronger Balance Sheet: Prabhudas Lilladher

Bank is on the mend with better visibility on stress reduction led by sustained recoveries while underwriting has become tighter.

<div class="paragraphs"><p>Punjab National Bank, Mumbai. (Source:&nbsp;Danish Siddiqui/ Reuters)</p></div>
Punjab National Bank, Mumbai. (Source: Danish Siddiqui/ Reuters)

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Prabhudas Lilladher Report

Our recent interaction with the management of Punjab National Bank suggests that the bank is on the mend with better visibility on stress reduction led by sustained recoveries while underwriting has become tighter.

To avoid further asset quality lapses, most underwriting is now done centrally and branches would only mobilise proposals. Hence fresh assets acquired since July 2020, have seen significantly low stress levels with net non-performing asset in agri at 0.25%, retail 0.38% and corporate 0.1%.

Guidance is to bring down gross non-performing asset to 9.0-9.5% by March 2023 and increase provision coverage ratio to 70% from 66% currently.

While system loan growth is strong at 16-17%, PNB would remain conservative and prioritise strengthening balance sheet which should result in credit growth between 12-14%.

Click on the attachment to read the full report:

Prabhudas Lilladher Punjab National Bank Update.pdf

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