By Ashwin Manikandan and Nishit Navin
MUMBAI (Reuters) -Punjab National Bank will focus on financing infrastructure, smart metering and renewable energy projects to revive its business loan growth, CEO Ashok Chandra said on Wednesday.
The New Delhi-based company, India’s second-largest state-owned lender by market value, had said earlier this year that it was targeting 11%-12% of overall loan growth in FY26.
However, the bank’s loans to businesses, which make up nearly 43% of PNB’s domestic advances, grew only 6.9% in the first quarter ended June.
Its loans to medium-and-small businesses rose 18.6% and retail loans grew 11.8%, which helped the overall domestic loans increase 9.6%, but it fell short of the target range.
“Subdued growth (in business loans) was because (of) some low-yielding advances…focus this year will be on project financing,” Chandra told Reuters in an interview, adding that the lender was once “very active” in this space and is now looking to revive it.
Apart from project financing, the bank will also target sectors such as real estate, rental discounting and data centres for lending opportunities, Chandra said.
The lender on Wednesday reported a net profit of 16.75 billion rupees for the first quarter, down 48% from 32.52 billion rupees a year earlier.
The fall in profit was mainly due to a one-time charge of 33.24 billion rupees, as a result of a change in tax regime. PNB’s profit before tax rose around 28%.
The gross non-performing asset ratio declined to 3.78% in the quarter from 3.95% in the previous three months.
The bank is on track to reach its gross non performing assets ratio level of below 3%, which would be PNB’s lowest on record, and meet its recoveries target of 160 billion rupees by FY26, Chandra said.
(Reporting by Ashwin Manikandan; Editing by Shinjini Ganguli)
