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PNB Plans to Expand Global Reach with Dubai Representative Office

11 June 20243 mins read by Angel One
PNB aims to expand globally by opening a representative office in Dubai. Regulatory clearance is pending. The company currently operates in six countries.
PNB Plans to Expand Global Reach with Dubai Representative Office
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Punjab National Bank plans to open a representative office in Dubai to extend its global reach. According to the Managing Director of PNB, Atul Kumar Goel, the board of directors has approved this initiative, and the bank is currently in the process of obtaining regulatory clearance.

He stated that if all regulatory approvals are in place, the representative office should be opened during the current financial year.

As of March 31, 2024, PNB operated in six countries through two subsidiaries (London-UK and Bhutan), one joint venture (Nepal), and two representative offices (Myanmar and Bangladesh).

Regarding the strategy to enhance profitability, the Managing Director outlined plans to bolster the retail, agriculture, and MSME portfolio, extend corporate loans prudently, manage asset quality, and enhance recovery efforts.

Additionally, efforts will be directed towards boosting forex income and generating higher fee income from the sale of third-party products to bolster non-interest income. To improve interest income, the bank aims to grow its low-cost deposit base, particularly CASA (Current Account Savings Account) deposits. As of March 2024, CASA constituted 41.4% of total deposits, with a target to surpass 42% by the end of the fiscal year. The bank aims to maintain credit costs below 1% in the current fiscal year.

With these initiatives, the Return on Assets (ROA) is projected to rise to 0.8% during the year, reaching 1% by March 2025, leading to a significant profit increase.

Anticipating business growth in the current fiscal year, Goel stated that credit growth is estimated at 11-12%, while deposits are expected to grow by 9-10%. To finance this growth, the bank has obtained approval to raise capital amounting to ₹17,500 crore through Tier I and Tier II bonds and private placement of shares. He further added that during FY 2024, the bank had raised ₹10,000 crore from Tier I and Tier II bonds at a very competitive rate.

About Punjab National Bank 

Punjab National Bank is the first Swadeshi Bank in India. It is a government-owned Banking and Financial service bank.

On June 10, 2024, the share price of Punjab National Bank Ltd opened at ₹125.85, touching the day’s high at ₹128.35, as of 12:22 PM on the NSE.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.

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