PNB to open office in Dubai, expanding international footprint
Punjab National Bank (PNB), a state-owned entity, has unveiled plans to establish a representative office in Dubai as part of its global expansion strategy. The bank's board of directors has already given the green light for this initiative, PNB's Managing Director, Atul Kumar Goel told PTI. Currently, the process of obtaining regulatory clearance is in progress.
PNB's Dubai office expected to be operational this year
Goel is hopeful that the Dubai office will commence operations within the current financial year, provided all necessary regulatory approvals are obtained. As of March 31, PNB had already established a presence in six countries including the UK and Bhutan through subsidiaries, a joint venture in Nepal, and representative offices in Myanmar as well as Bangladesh.
PNB's strategy to improve profitability and expand portfolio
PNB is not only expanding its global footprint but also focusing on enhancing profitability. Goel revealed that the bank's strategy includes growing its retail, agriculture, and MSME (RAM) portfolio, extending good corporate loans, controlling slippages, and improving recovery. The bank is also working toward increasing forex income and generating higher fee income via selling third-party products, to boost non-interest income.
PNB aims to increase low-cost deposit CASA
To boost interest income, Goel stated that PNB plans to increase its low-cost deposit Current Account Savings Account (CASA). As of March, CASA made up 41.4% of total deposits. The bank aims to push this beyond 42% by the end of the present fiscal year. PNB is also aiming to keep credit cost below 1% during this financial year. Goel expects the Return on Assets (ROA) to increase to 0.8% during the year and reach 1% by March 2025.
PNB's business growth and capital raising plans
For the present financial year, Goel anticipates a credit growth of 11-12% and deposit growth of 9-10%. To fund this expansion, PNB has approved raising capital of ₹17,500 crore from Tier I and Tier II bonds, and stock sale through private placement during the year. In the previous fiscal year, PNB raised ₹10,000 crore from Tier I and Tier II bonds at competitive rates.
