PNB - Punjab National Bank Share Price

Question 1: "What was the reason for not offsetting the floating provision regarding an account that became standard?"

Answer: I acknowledge your point. We did not release the provision for that account, as we are still holding it. The INR955 crores in floating provision was made to prepare for the upcoming ECL implementation from 1st April 2027, ensuring clarity in our balance sheet moving forward. Without this provision, our profit would have exceeded INR6,000 crores.

Question 2: "What would the expected credit cost run rate be under ECL?"

Answer: Our rough estimate indicates a total capital requirement of around INR9,000 to INR10,000 crores for full ECL implementation. With INR1,775 crores already provided, we identify a need for around INR500 crores each quarter over time. This implies a potential credit cost increase of about 10-15 basis points.

Question 3: "Is the floating provision included in net NPA calculations?"

Answer: No, the floating provisions do not affect net NPA calculations; the absolute net NPA remains at approximately INR3,834 crores without their inclusion.

Question 4: "What impact will the new labour code have on your bank?"

Answer: There is no impact from the implementation of the new labour code, as we have already been following its guidelines. Our current practices exceed the new stipulations, ensuring compliance without incurring additional costs.

Question 5: "What are your expectations for recovery in the next quarter?"

Answer: For Q4, we expect total recoveries exceeding INR4,000 crores, including around INR1,500 to INR1,600 crores from TWO recoveries. We have set these targets confidently based on current trends.

Question 6: "Could you clarify the declining trends in investment yields?"

Answer: Declining yields are influenced by market dynamics and include one-time impacts from previous quarters like dividend income. Current treasury gains are stable, expected between INR1,300 to INR1,500 crores consistently.

Question 7: "What is your guidance for net and gross NPAs for FY '26?"

Answer: We maintain our guidance that gross NPA will remain below 3%, with net NPA possibly reaching below 0.30%. We're actively working to hold net NPA at 0.32% and further reduce it.

Question 8: "Are your recovery strategies effective for written-off loans?"

Answer: Yes, we've seen success with our recovery strategies. Recently, substantial recoveries were made from small accounts, and we anticipate maintaining this momentum, targeting significant recoveries in the upcoming quarter.

These responses address key queries from the earnings call, encapsulating vital financial insights and future guidance while remaining within the character limit.