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India's second-largest lender Punjab National Bank (PNB) expects to triple its net profit during the current financial year to Rs 60 bn, compared to Rs 20.2 bn during the financial year, MD and CEO SS Mallikarjuna Rao said on Saturday.

The lender also expects to grow its loan book by 8% during the financial year 2022, despite Covid-related impacts.

However, the domestic advances of the lender had declined 3% year on year (YoY) to Rs 7.2 bn during the March quarter.

"For FY22, our net profit should not be less than Rs 60 bn at the conservative level. It all depends on credit growth, demand in the economy," PNB MD SS Mallikarjuna Rao said on Saturday during the earnings call.

Mr. Rao, however, mentioned that accurate estimation could be done after the end of the first quarter of the current financial year.

On loan growth, Rao said, "At the conservative level, we would like to show a growth rate of 8% if the economy moves on expected lines where the GDP growth is 9.5% and the Covid-19 impact is reduced or eliminated by June."

The lender has identified non-performing assets (NPAs) worth Rs 80 bn that it will transfer to the national asset reconstruction company (NARCL).

However, the operational guidelines are in the final stages, and the decision of whether such assets will have to be transferred to NARCL at net book value, is yet to be taken, he added.

How this pans out remains to be seen. Meanwhile, we will keep you updated on the latest news from this space.

Punjab National Bank's share price ended the day down by 2.4% on the BSE.

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Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research ...

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