India's Punjab & Sind bank chief declares war against bad loans

Punjab & Sind Bank

02/08/2022 10:24

By Nupur Anand
    MUMBAI, Aug 2 (Reuters) - The focus for India's Punjab &
Sind Bank  PUNA.NS  is to reduce its bad loans and improve
recoveries to ensure that gross non-performing assets fall below
10% by the end of FY23, the state-owned lender's chief said on
Tuesday.
    "We have declared a war against non-performing assets and
aim to also keep slippage low," Swarup Kumar Saha, managing
director of Punjab & Sind Bank, who took charge in June told
Reuters. "We are also carrying out aggressive recovery drives
and expect to recover 25 billion rupees ($317.91 million) worth
of loans in this financial year."
    The bank will also be transferring bad loans worth over five
billion rupees to national bad bank which will also help to trim
toxic assets.
    Gross non-performing assets for the bank for the June
quarter was at 11.34%, higher compared to its peers.
    At a system level too, bad loans have been coming down and
was at a six-year low of 5.9% in March 2022 which the country's
central bank expects to decline further.  urn:newsml:reuters.com:*:nL1N2YH0QY
    Saha said the lender also intends to improve its credit
growth by focusing on retail, agriculture and small- and
medium-size business loans to bring the bank back to the growth
curve after a subdued performance in the last few years.
    "Overall we expect the credit growth to be over 15% for
FY23. Earlier there was a conscious decision to reduce our
corporate loan exposure which had led to a degrowth in the
segment, but now we are also focusing on growing corporate
loans," he added.
    The bank's gross advances grew by 7%, while deposits inched
up by only 3% in the quarter ended June.
    To improve deposit growth the lender has launched new
products at competitive rates and may hike rates in deposits
further in the coming weeks.
    The bank remains well capitalised and the management will
take a call on capital raising after the September quarter, Saha
added.

 (Reporting by Nupur Anand; Editing by Shailesh Kuber)
 ((Nupur.Anand@thomsonreuters.com; +9122 68414388;))