India’s Punjab National Bank aims to complete a share sale to large investors within the next six months, its chief executive said Friday, as the state lender seeks to strengthen its capital.
Banks in Asia’s third-largest economy are increasing their capital to meet growing demand for loans. The country’s largest lender, State Bank of India, is also open to raising equity.
Punjab National Bank’s board in December approved a 75 billion rupees ($898 million) fundraising through equity.
A qualified institutional placement (QIP) involves selling shares to institutional buyers without offering them to the public.
“For QIP, we are trying to get all approvals, but within six months we will try to raise funds from the market,” said Atul Kumar Goel, managing director and chief executive officer of PNB, while speaking at the press conference. an interview. REGULAR GROWTH IN LOANS
For FY2025, Punjab National Bank’s loan growth is expected to be between 11% and 12%, the managing director said, while the rise was 11.2% year-on-year in January-March.
The aim is to grow deposits by 9-10 per cent this fiscal year, Goel said, compared to growth of nearly 7 per cent in January-March.
The bank’s corporate loan pipeline stands at around Rs 1 trillion, of which around Rs 600-700 billion has been approved, the CEO said. PRIORITY ON ASSET QUALITY AND EXPANSION
Punjab National Bank, whose net profit more than doubled in January-March on lower provisions for loan losses, aims to improve its asset quality in 2024-25, with recoveries of bad loans from order of Rs 180 billion, Mr. Goel said.
The gross and net non-performing asset ratios will be reduced to less than 5% and 0.5% by March 2025, from 5.73% and 0.73%, respectively, at the end of March, a declared the CEO.
The bank aims to add 150 branches this fiscal year, he added.
PROVISIONS FOR INFRASTRUCTURE
Indian banks will “soon” provide feedback on a central bank proposal to strengthen rules on lending for infrastructure projects, the CEO said.
The guidelines, if implemented as proposed, will not impact project financing and the lender will be able to comply with them, Goel said.
($1 = 83.4750 Indian rupees) (Reporting by Siddhi Nayak; Editing by Mrigank Dhaniwala)
