Punjab National Bank To Open Dubai Representative Office: Details Inside!

In an endeavor to broaden its global reach, Punjab National Bank (PNB), a state-owned entity, is in the process of establishing a representative office in Dubai.

This strategic move, aimed at expanding its footprint internationally, has received approval from the bank's board of directors and is currently undergoing regulatory clearance procedures, as reported by News 18.

Punjab National Bank To Open In Dubai - Here are Details

Atul Kumar Goel, the managing director of PNB, shared insights with the news agency PTI regarding the progress of this initiative. He expressed hope that the representative office would be operational within the ongoing financial year, provided that all necessary regulatory approvals are obtained in due course.

As of March 31, 2024, PNB already boasted a presence in six countries, facilitated by two subsidiaries in London (UK) and Bhutan, a joint venture in Nepal, and two representative offices in Myanmar and Bangladesh, respectively. Goel outlined the bank's strategy to enhance profitability, emphasizing a multi-pronged approach that includes expanding retail, agriculture, and MSME portfolios, extending corporate loans, managing slippages, and enhancing recovery efforts, as reported by News 18.

Additionally, PNB aims to bolster its forex income and increase fee income by selling third-party products, thereby augmenting its non-interest revenue streams. Regarding interest income improvement, Goel highlighted a focus on boosting low-cost deposits, particularly Current Account Savings Account (CASA) deposits. As of March 2024, CASA constituted 41.4 percent of total deposits, with a targeted increase beyond 42 percent by the end of the current fiscal year.

The bank is committed to maintaining credit costs below 1 percent during the financial year, with aspirations to elevate Return on Assets (ROA) to 0.8 percent by the year-end, eventually reaching 1 percent by March 2025. In terms of business growth projections, Goel indicated an expected credit growth of 11-12 percent and a deposit growth of 9-10 percent for the current financial year, as per media report.

To finance this growth trajectory, PNB has secured approval to raise capital amounting to Rs 17,500 crore through Tier I and Tier II bonds and private share placement. In the previous fiscal year (FY'24), the bank successfully raised Rs 10,000 crore through bond issuance at competitive rates, as per PTI reports.

PNB's financial performance for the fourth quarter of FY 2023-24 was notably robust, with a remarkable 160 percent increase in net profit, totaling Rs 3,010.27 crore. Sequentially, the bank witnessed a 35 percent surge in net profit. Moreover, the gross non-performing assets (NPA) ratio exhibited improvement, declining to 5.73 percent from 6.24 percent in the preceding quarter and significantly lower than the 8.74 percent recorded a year ago.