New Delhi: Punjab National Bank (PNB) on Monday said its overall credit growth is likely to be at around 4-6 per cent in the current fiscal year as it expects the economy to return to normalcy from October onwards.
"We still maintain that our overall credit growth would be around 4-6 per cent. We are expecting the economy to come back more effectively from October onwards. Though some of the sectors would be impacted, it will take longer period for them (to recover)," PNB managing director and CEO S S Mallikarjuna Rao said at a virtual news conference here.
Rao said tourism, hospitality and aviation are among the sectors that will take longer time to recover or get back on track in view of the changing social behaviour after the COVID-19 outbreak.
However, it is expected that a majority of the economic sectors will return to normalcy by October, he said. "So as on date, we are not recalculating or reviewing our credit growth anticipation or guidance. We will stick to 4-6 per cent. We may look at the position only after October," Rao said.
Earlier in June, PNB had revised its loan growth target to 6 per cent for the current fiscal due to the COVID-19 crisis.
Meanwhile, the lender has reported a standalone net profit of Rs 308 crore for the quarter ended June 2020. PNB had posted a net profit of Rs 1,018.63 crore during the corresponding April-June period of 2019-20.
It, however, clarified that the numbers for the latest quarter were not comparable vis-a-vis a year-ago figures as the peer Oriental Bank of Commerce and United Bank of India were merged into PNB with effective April 1, 2020.
Moreover, The country's second largest state-owned lender on Monday said it does not envisage approaching the government for capital support rather it intends to raise funds from the market, which seems to have appetite for the public sector banking space.
The bank has shareholders' approval for raising Rs 14,000 crore, comprising Rs 7,000 crore of the equity alone, from the market to meet COVID-related impact and finance growth, Punjab National Bank (PNB) Managing Director S S Mallikarjuna Rao said in a virtual interaction with reporters.
"As on today, it does not appear (approach government for capital). If you look at market appetite also there is intent to contribute to public sector space in general," he said. This is evident from the recent issuance of Tier II bonds of Bank of Baroda and PNB as coupon rates were reasonable, he said.
"There is an appetite in the market. So, unless we test in the market, it would not be appropriate for us to think of government for contribution...We are confident of going to the market with respect to Tier II and Tier I bonds during Q2 and Q3 while we are looking at the end of Q3 or during Q4 for QIP (qualified institutional placement)," he said.
Asked about the subdued share price of the bank, he said the government has 85.5 per cent stake in the bank leaving less than 15 per cent for the market to trade.
Shares of the bank were hovering around Rs 65 level during the last week of August 2019 as compared to Rs 35.30 on Monday on the BSE.