Punjab National Bank plans institutional share sale within 6 months

Punjab National Bank, country’s leing state-run lender, aims to conclude a planned share sale to institutional investors within next six months, Chief Executive Officer said on Friday, as bank endeavours to fortify its capital base.

With demand for loans on rise, banks in India are actively enhancing ir capital reserves. Notably, country's largest lender, State Bank of India (SBI.NS), has also signalled its openness to raise equity capital.

In December, Punjab National Bank's board approved a fund raise of Rs 7,500 crore through equity capital.

A qualified institutional placement (QIP) entails selling shares to institutional buyers without offering m to general public.

"Attempting to secure all requisite approvals for QIP, we aim to raise capital from market within six months," stated Atul Kumar Goel, Managing Director and Chief Executive Officer of PNB, in an interview.

Looking ahe to financial year 2025, Punjab National Bank envisions a loan growth of 11-12 per cent, according to CEO, building on an 11.2 per cent year-on-year increase witnessed in January-March.

bank sets its sights on deposit growth ranging from 9 per cent to 10 per cent for fiscal year, compared to a nearly 7 per cent growth observed in January-March.

Goel disclosed that bank's corporate loan pipeline stands at approximately Rs 1 lakh crore, out of which roughly Rs 60,000 crore to Rs 70,000 crore have been sanctioned.

Punjab National Bank, reporting a more than doubled net profit in January-March amid a decline in loan-loss provisions, aims to enhance its asset quality in 2024-25, targeting b loan recoveries of around Rs 18,00 crore, as per Goel.

CEO outlined plans to reduce gross and net non-performing asset ratios to below 5 per cent and 0.5 per cent, respectively, by March 2025, from 5.73 per cent and 0.73 per cent at March-end.

bank has set an ambitious target to d 150 branches during current fiscal year.

Regarding infrastructure project loans, Goel mentioned that banks would imminently share ir feedback on a central bank proposal for tightening regulations. He affirmed that if implemented as proposed, guidelines would not impede project financing, and bank would be well-positioned to comply.

(With Reuters inputs)