{"id":158062,"date":"2024-01-26T06:22:02","date_gmt":"2024-01-26T11:22:02","guid":{"rendered":"https:\/\/44.250.171.167\/?p=158062"},"modified":"2024-01-26T06:22:03","modified_gmt":"2024-01-26T11:22:03","slug":"punjab-national-bank-q3-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/punjab-national-bank-q3-fy24-earnings-conference-call-insights\/","title":{"rendered":"Punjab National Bank Q3 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Punjab National Bank (PNB) Q3 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Business Growth<\/strong>\n<ul>\n<li>Total business grew by 10.82% year-over-year to INR 22,90,074 crore.<\/li>\n<li>Deposits grew by 9.35% to INR 13.23 lakh crore.<\/li>\n<li>Advances grew by 12.90% to INR 9.67 trillion.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Profitability<\/strong>\n<ul>\n<li>Net interest income increased by 12.14% to INR 10,293 crore.<\/li>\n<li>Operating profit increased by 10.77% to INR 6,331 crore.<\/li>\n<li>Net profit increased by 253.39% to INR 2,223 crore, highest in last 15 quarters.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Asset Quality<\/strong>\n<ul>\n<li>Gross NPA reduced from 9.76% to 6.24% and from INR 83,584 crore to INR 60,371 crore.<\/li>\n<li>Net NPA reduced from 3.3% to 0.96% and from INR 13,114 crore to INR 8,816 crore.<\/li>\n<li>Provision coverage ratio increased from 85% to 94%.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capital Adequacy<\/strong>\n<ul>\n<li>Total capital adequacy stands at 14.63%, reduced from 15.09% due to increase in RWA.<\/li>\n<li>Board approved raising INR 12,000 crore capital in FY23, of which INR 7,153 crore already raised.<\/li>\n<li>Board also approved raising INR 7,500 crore equity capital in FY24.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Credit Costs<\/strong>\n<ul>\n<li>Credit costs reduced from 1.26% in Dec 2022 quarter to 1.31% in Sep 2023 quarter.<\/li>\n<li>Provisions reduced from INR 3,018 crore in Sep 2023 quarter to INR 2,993 crore in Dec 2023 quarter.<\/li>\n<li>Expects significant reduction in provisions going forward due to high PCR of 94%.<\/li>\n<li>Credit costs expected to be around 1% or lower in FY24 versus 1.5% guidance for FY23.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Wage Revision Provisions<\/strong>\n<ul>\n<li>Provided INR 800 crore for wage revision in Q3FY23, up from INR 694 crore in Q2FY23.<\/li>\n<li>Went from providing 10% to 14% in Q2 to providing 17% in Q3 on basic pay since Nov 2022.<\/li>\n<li>Staff costs remained flat QoQ as wage provision was offset by lower AS15 provision of INR 322 crore versus INR 1,330 crore in Q3FY22.<\/li>\n<\/ul>\n<\/li>\n<li><strong>NIMs and Yields<\/strong>\n<ul>\n<li>NIM increased QoQ to 3.15% from 3.05%.<\/li>\n<li>Expects NIM to remain around 3% guidance.<\/li>\n<li>Focus is on growing NII in absolute terms quarter-on-quarter.<\/li>\n<li>Yield on advances increased by 29-30 bps QoQ while cost of deposits was up 10 bps.<\/li>\n<li>Helped drive 12.14% growth in NII QoQ.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Deposit Growth<\/strong>\n<ul>\n<li>Not focused on raising high cost bulk deposits given excess SLR and strong CASA.<\/li>\n<li>Low cost CASA deposits up 6.26% YoY.<\/li>\n<li>Opened 76.65 lakh savings accounts in 9MFY23 versus 85 lakh in FY22.<\/li>\n<li>Expects deposit costs to remain elevated over next 6 months.<\/li>\n<li>Loan repricing will also take time to come off.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Retail\/Corporate Loan Growth<\/strong>\n<ul>\n<li>Seeing good demand in vehicle, housing and personal loans.<\/li>\n<li>Housing up 30%, vehicle loans up 26%, personal loans up 30%.<\/li>\n<li>Overall retail, agri, MSME (RAM) to continue growing at 15-16%.<\/li>\n<li>Expects some increase from 10-11% yoy growth currently.<\/li>\n<li>Demand starting to pick up but not a sharp jump.<\/li>\n<li>Guidance remains at 12-13% growth for FY23.<\/li>\n<\/ul>\n<\/li>\n<li><strong>NCLT Recoveries<\/strong>\n<ul>\n<li>Recovered INR 1,831 crore from NCLT accounts in Q3FY23.<\/li>\n<li>Expects around INR 4,000-5,000 crore of annual recovery from NCLT accounts.<\/li>\n<li>Accounts for about 1\/3rd of total recoveries; focused on recovery from all sources.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Return on Assets<\/strong>\n<ul>\n<li>Targeting ROA of 1% by end of FY24-25.<\/li>\n<li>Significant reduction in credit costs will help drive ROA higher.<\/li>\n<li>Provision cover at 94% will also support profitability.<\/li>\n<\/ul>\n<\/li>\n<li><strong>ECL Implementation<\/strong>\n<ul>\n<li>Final ECL guidelines still in draft form, up to regulator to decide timeline.<\/li>\n<li>Bank is ready for implementation whenever final guidelines released.<\/li>\n<li>Not overly concerned given current high PCR of 94%.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Digital Spends<\/strong>\n<ul>\n<li>Annual budget for IT is around INR 2,500 crore.<\/li>\n<li>Major HR transformation project underway, to be implemented by Mar 2024.<\/li>\n<li>Adequate investments being made in HR and digital.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Punjab National Bank (PNB) Q3 FY24 Earnings Concall Business Growth Total business grew by 10.82% year-over-year to INR 22,90,074 crore. Deposits grew by 9.35% to INR 13.23 lakh crore. Advances grew by 12.90% to INR 9.67 trillion. Profitability Net interest income increased by 12.14% to INR 10,293 crore. Operating profit increased by [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,1],"tags":[151,10169,10097],"class_list":["post-158062","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-finance-stocks","tag-banking","tag-earnings","tag-financial-service"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":158394,"url":"https:\/\/alphastreet.com\/india\/punjab-sind-bank-q3-fy24-earnings-conference-call-insights\/","url_meta":{"origin":158062,"position":0},"title":"Punjab &#038; Sind Bank Q3 FY24 Earnings Conference Call Insights","author":"Praveen","date":"February 2, 2024","format":false,"excerpt":"Key highlights from Punjab & Sind Bank (PSB) Q3 FY24 Earnings Concall Financial Performance CASA ratio improved by 158 bps to 32.77% sequentially. 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The stock reached an intraday high of INR 330.50 and a low of INR 321.65. 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