{"id":166837,"date":"2025-02-12T11:00:29","date_gmt":"2025-02-12T16:00:29","guid":{"rendered":"https:\/\/44.250.171.167\/?p=166837"},"modified":"2025-02-12T11:00:29","modified_gmt":"2025-02-12T16:00:29","slug":"pnb-q3-2024-2025-call-highlights-stable-deposits-lower-credit-costs-and-digital-milestones","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/pnb-q3-2024-2025-call-highlights-stable-deposits-lower-credit-costs-and-digital-milestones\/","title":{"rendered":"PNB Q3 2024-2025 Call Highlights: Stable Deposits, Lower Credit Costs and Digital Milestones!"},"content":{"rendered":"<p>Punjab National Bank, the second largest public sector bank in India in terms of business volumes, in its Q3 earnings call outlined the bank&#8217;s stable growth path, targeting 13-14% credit growth with strong asset quality (97% provision coverage ratio). The bank saw lower other income in Q3 due to reduced technical write-off recoveries and negative MTM provisions. The bank addressed that its digital initiatives showed progress with 2 crore mobile app logins and new MSME digital lending up to INR25 lakh. Looking ahead, PNB expects INR5,000-6,000 crore in total Q4 recoveries, maintaining stable deposit costs due to its large CASA base of INR5,62,156 crore, while keeping loan growth guidance at 12-13% for FY25.<\/p>\n<p>Punjab National Bank showcased outstanding financial results in Q3 FY25, with its standalone net profit doubling to INR4,508 crore from INR2,223 crore year-over-year. The bank demonstrated broad-based growth with total income reaching INR34,752 crore and interest income increasing to INR31,340 crore from INR27,288 crore. The bank&#8217;s asset quality saw notable improvement, with gross NPAs declining to 4.09% from 6.24% and net NPAs decreasing to 0.41% from 0.96% compared to the previous year. This enhanced asset quality enabled a significant reduction in bad loan provisions to INR318 crore from INR2,994 crore, which helped boost investor confidence and drove the bank&#8217;s shares up by 5.54% to INR101.87 on the NSE.<\/p>\n<p>Continue Reading: Discover the Vital Insights from Punjab National Bank&#8217;s Earnings Call!<\/p>\n<p><strong>Financial\/Operational Metrics:<\/strong><\/p>\n<ul>\n<li><strong>Revenue:<\/strong> INR35,286 crore, up 15% YoY.<\/li>\n<li><strong>Net Profit<\/strong>: INR4,648 crore, up 103% YoY.<\/li>\n<li><strong>EPS<\/strong>: INR4.18, up 103% YoY.<\/li>\n<li><strong>Net Interest Income (NII)<\/strong>: INR11,032 crore, up 7.2% YoY.<\/li>\n<li><strong>Total Term Deposit<\/strong>: INR9,67,543 crore, up 24.7% YoY.<\/li>\n<\/ul>\n<p><strong>Outlook:<\/strong><\/p>\n<ul>\n<li><strong>Focus on Digital Capabilities: <\/strong>Expansion of mobile app and WhatsApp banking.<\/li>\n<li><strong>Capital Strengthening: <\/strong>Tier-1 and Tier-2 capital enhancement to support growth.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><strong>Analyst Crossfire:<\/strong><\/p>\n<ul>\n<li><strong>Growth Strategy &amp; CEO Transition, Credit Cost &amp; Profitability Outlook (Mahrukh Adajania &#8211; Nuvama): <\/strong>Despite the CEO change, PNB will maintain its existing growth trajectory. Strategic adjustments in deposit costs and loan yields will be made to enhance profitability, leveraging a strong corporate book for sustained performance. With a 97% provision coverage ratio (PCR), PNB expects continued low credit costs. Recovery trends exceed slippages, supporting stable profitability and maintaining net interest margin (NIM) in the 2.9%-3% range<strong> (Ashok Chandra &#8211; MD &amp; CEO).<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>SMA Trends &amp; Slippages, Other Income Decline (Jay Mundra &#8211; I-Sec, Ashok Ajmera &#8211; Ajcon Global): <\/strong>SMA-0, 1, and 2 total 7% of loans, with SMA-0 being the largest portion due to temporary repayment delays in retail accounts. PNB is confident in maintaining slippages at the INR1,600-INR1,800 crore range. A drop in recovery from technical write-offs (TWO) and mark-to-market (MTM) provisions led to lower other income this quarter, but recoveries are expected to pick up in the coming quarters<strong> (Ashok Chandra &#8211; MD &amp; CEO).<\/strong><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Treasury Operations &amp; Interest Rate Outlook, Retail Deposit Strategy (Ashok Ajmera &#8211; Ajcon Global, Rakesh Kumar &#8211; B&amp;K Securities): <\/strong>PNB expects better treasury performance in Q4, aided by RBI\u2019s INR60,000 crore open market operations and potential rate cuts. Despite strong deposit growth of 4.9%, term deposit (TD) costs remained stable due to a special 7.25% deposit scheme and PNB\u2019s high CASA portfolio, which grew by 2.7%<strong> (Ashok Chandra &#8211; MD &amp; CEO)<\/strong>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Corporate Lending &amp; Benchmarking, Repricing Strategy for Margins (Rakesh Kumar &#8211; B&amp;K Securities): <\/strong>PNB increased the share of T-Bill-linked loans from 8.4% to 11%, a strategic shift rather than corporate pricing pressure. The bank leveraged liquidity for short-term lending to optimize margins. PNB has been repricing corporate loans below 7% and adjusting spreads on short-term borrowing to protect margins despite shifting to T-Bill-based lending<strong> (Ashok Chandra &#8211; MD &amp; CEO)<\/strong>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Repricing Strategy for Margins &amp; Actuarial Provisions (Rakesh Kumar &#8211; B&amp;K Securities): <\/strong>PNB has been repricing corporate loans below 7% and adjusting spreads on short-term borrowing to protect margins despite shifting to T-Bill-based lending. PNB increased provisions in Q2 due to yield fluctuations but now expects a stable provision of INR1,400 crore per quarter based on current assumptions<strong> (Ashok Chandra &#8211; MD &amp; CEO)<\/strong>.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<ul>\n<li><strong>Recovery Target for FY25 (Aditi Nawal &#8211; Individual Investor): <\/strong>PNB aims to achieve INR18,000 crore in recoveries, with INR5,000-6,000 crore expected in Q4 from delayed corporate recoveries<strong>. <\/strong>PNB expects strong future recoveries from its INR91,000 crore TWO book, including INR54,000 crore in NCLT cases<strong> (Ashok Chandra &#8211; MD &amp; CEO)<\/strong>.<\/li>\n<\/ul>\n<p><strong>To get further Insights: <a href=\"https:\/\/app.asai.alphastreet.io\/test-drive\/transcript\/view\/b39ecd68-7a60-5d42-9066-3ae6c3f7c14c\/earnings_conference\" target=\"_blank\" rel=\"noopener\">Click Here<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Punjab National Bank, the second largest public sector bank in India in terms of business volumes, in its Q3 earnings call outlined the bank&#8217;s stable growth path, targeting 13-14% credit growth with strong asset quality (97% provision coverage ratio). The bank saw lower other income in Q3 due to reduced technical write-off recoveries and negative [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":162998,"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":[10169,9488],"class_list":["post-166837","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-finance-stocks","tag-earnings","tag-financial-serives"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2024\/07\/CC_Image_8.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":158062,"url":"https:\/\/alphastreet.com\/india\/punjab-national-bank-q3-fy24-earnings-conference-call-insights\/","url_meta":{"origin":166837,"position":0},"title":"Punjab National Bank Q3 FY24 Earnings Conference Call Insights","author":"Praveen","date":"January 26, 2024","format":false,"excerpt":"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. 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