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PNB eyes profit at nearly Rs 6,000 crore in FY'22

Despite COVID-19, PNB bank's profit surged over five times to Rs 2,022 crore during the financial year ended March 2021, against Rs 363.34 crore during 2019-20.

PNB eyes profit at nearly Rs 6,000 crore in FY22

Country's second largest lender Punjab National Bank (PNB) on Saturday said it is expecting nearly three-fold jump in its net profit to Rs 6,000 crore during the current fiscal as consolidation process is over.

"Our projection for FY'22 overall net profit should not be less than Rs 6,000 crore at the conservative level. It all depends on credit growth, demand in the economy," PNB Managing Director SS Mallikarjuna Rao said while speaking to media on FY21 fourth quarter numbers.

On the loan growth, Rao said, it should be between 8 and 10 per cent for the banking industry on the assumption that the economy will grow at 9.5 per cent in 2021-22.

The city-headquartered state-owned bank had acquired 23 per cent stake in the life insurer post amalgamation of the erstwhile Oriental Bank of Commerce (OBC) into itself last fiscal year.

"We have shareholding in two insurance companies because of the amalgamation and IRDAI had given us forbearance to continue to hold stake in both the companies up to March 2021 IRDAI guidelines say a bank cannot hold more than 10 per cent stake in the second insurance company. Considering all these factors, we have decided at board level to exit from Canara HSBC OBC Life Insurance Company," he said.

PNB is also a promoter of another insurer PNB Metlife Insurance, owning the highest stake of 30 per cent. The company was set up in 2001, in which other shareholders include US-based Metlife with 26 per cent, Elpro (21 per cent) and M Pallonji & Company (18 per cent).

With regard to PNB Housing Finance, Rao said, the bank would continue to hold its stake in the housing finance company and is not looking at divestment.

The board had approved a preferential allotment on a private placement basis, an aggregate of 8,20,51,281 equity shares and 2,05,12,820 warrants exchangeable into equity shares for Rs 390 per share warrant to Pluto Investments S.a r.l, Salisbury Investments Pvt Ltd, General Atlantic Singapore Fund FII Pte Ltd and Alpha Investments V Pte Ltd in specified proportions for cash consideration aggregating to approximately Rs 4,000 crore.

However, PNB will continue to be classified as part of the "promoter group" following the completion of this transaction.

Dwaipayan Bhattacharjee
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