“We have declared war on non-performing assets and the aim is to keep slippage down,” Swarup Kumar Saha, managing director of Punjab and Sind Bank, who took charge in June, said. “We are also pursuing an aggressive recovery campaign and expect to recover 25 billion rupees ($317.91 million) of debt this fiscal year.”
The bank will transfer over Rs 5 billion of bad loans to the National Bad Bank which will also help in reducing toxic assets.
Gross non-performing assets for the bank for the June quarter stood at 11.34%, higher than its peers.
Even at the system level, bad loans are reducing and were at a six-year low of 5.9% in March 2022, which the country’s central bank expects to decline further.
Saha said the lender is looking to improve its credit growth by focusing on retail, agriculture and small and medium-sized business loans to put the bank back on the growth curve after a weak performance in the past few years.
“Overall we expect credit growth to be over 15% for FY23. Earlier it was a conscious decision to reduce our corporate credit exposure, which led to a downtrend in the segment, but now we are looking at rising corporate debt. are also focused,” he said. added.
The bank’s gross advances grew 7% in the quarter ended June, while deposits grew only 3%.
To improve deposit growth, the lender has launched new products at competitive rates and may further increase deposit rates in the coming weeks.
Saha said the bank is well capitalized and the management will take a decision on raising capital after the September quarter.