State-owned Punjab National Bank (PNB) posted an impressive 307 percent year-on-year (YoY) surge in net profit, reaching Rs 1,255 crore for the quarter ended June 30, 2023 (Q1FY24). In comparison, the bank reported a net profit of Rs 308 crore in the same period last year.

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Atul Kumar Goel, the MD & CEO of PNB, told CNBC-TV18 that the loan growth for financial year 2024 is anticipated to be around 12-13 percent. While the loan growth for the last quarter exceeded expectations at 14.58 percent, PNB is maintaining the guidance at 12-13 percent due to some short-term loans.

PNB's net interest income (NII) for the reporting quarter surged by 26 percent, reaching Rs 9,504.3 crore compared to Rs 7,542.8 crore in the corresponding quarter of the previous year. Provisions (other than tax) and contingencies dropped by 17 percent to Rs 3,965 crore in the June quarter, down from Rs 4,790 crore in the same quarter last year. Additionally, provisions for bad loans reduced to Rs 4,374 crore in the reporting quarter from Rs 4,814 crore in the year-ago period.

Atul Kumar Goel assured that the deposit situation is not a concern for the bank. PNB boasts of a solid customer base of 16 crore customers and has experienced significant growth in savings and current accounts. The bank achieved a deposit growth of over 14 percent, with a particular focus on current account/savings account (CASA) deposits. PNB maintains its guidance for deposits at 10 to 11 percent as it already has excess SLR (Statutory Liquidity Ratio) of around 5-6 percent.

SLR refers to the portion of a bank's total deposits that it is required to maintain in the form of liquid assets. These liquid assets typically include cash, gold, and approved securities like government bonds.

Regarding fundraising plans, Goel said that the bank's capital adequacy stands at 15.54, well above the required norm of 11.5, which means there is no immediate need for fundraising. However, PNB has obtained board approval for raising Rs 12,000 crore in the current financial year, including Rs 7,000 crore for AT-1 (Additional Tier-1) bonds and Rs 5,000 crore for tier-II bonds. The bank has already raised approximately Rs 394 crore through tier-II bonds in the June 2023 quarter and is awaiting favorable rates to proceed with the issuance of AT-1 bonds.

Shares of PNB are currently trading at Rs 62, a decline of 0.89 percent from the previous close on the BSE.