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By Siddhi Nayak
MUMBAI (Reuters) - India's Punjab National Bank aims to close a planned share sale to large investors over the next 6 months, its chief executive said on Friday, as the state-run lender looks to shore up capital.
Banks in Asia's third-largest economy are boosting their capital base to meet the rising demand for loans. The country's largest lender, State Bank of India, is also open to raise equity capital.
Punjab National Bank's board had in December approved a 75 billion rupees ($898 million) fund raise through equity capital.
A qualified institutional placement (QIP) involves selling shares to institutional buyers without offering them to the public.
"For the QIP, we are trying to get all the approvals, but within six months we will try to raise the money from the market," PNB's Managing Director and Chief Executive Officer Atul Kumar Goel said in an interview.
STEADY LOAN GROWTH
For the financial year 2025, Punjab National Bank's loan growth should be 11%-12%, the CEO said, compared with an 11.2% year-on-year rise in January-March.
It aims to grow deposits by 9%-10% in the fiscal year, Goel said, compared with a near 7% growth in January-March.
The bank's corporate loan pipeline stands at around 1 trillion rupees, of which around 600 billion rupees-700 billion rupees has been sanctioned, the CEO said.
FOCUS ON ASSET QUALITY, EXPANSION
Punjab National Bank, whose net profit more than doubled in January-March amid a drop in loan-loss provisions, aims to improve its asset quality in 2024-25, with bad loan recoveries seen around 180 billion rupees, Goel said.
The gross and net non-performing asset ratios will be brought down to less than 5% and 0.5% by March 2025, from 5.73% and 0.73%, respectively, at March-end, the CEO said.
The bank aims to add 150 branches this fiscal year, he said.
INFRASTRUCTURE PROVISIONS
Indian banks will "soon" share their feedback on a central bank proposal for tightening rules for infrastructure project loans, the CEO said.
The guidelines, if implemented as proposed, won't impact project financing and the lender will be in a position to comply, Goel said.
($1 = 83.4750 Indian rupees)
(Reporting by Siddhi Nayak; Editing by Mrigank Dhaniwala)