'Deposit rate reduction by 70-80 bps will ease margin pressure in H2'

PUNJAB National Bank PNB) reported strong second quarter numbers, with a 14% jump in net profit, robust business growth and sharp improvement in asset quality. The bank’s MD and CEO, Ashok Chandra, spoke to Dipak Mondal and provided insights into the key growth drivers, and addressed key concern areas like flat net interest income NID and margin pressure. Excerpts:

- Dipak Mondal

Your net profit grew by 14%, but NII remained flat while asset quality improved significantly. What were the main drivers this quarter?

Retail, agriculture, and MSME have played an important role. We have activated our 10,200 branches the second-largest network in the country and business should come from there, which has now started. Retail grew by 18.1%, agriculture by 13%, and MSME by 18.6%. This gives us confidence that credit growth is on track. Our corporate loan book also showed a year-on-year growth of 7.9% and a quarter-on-quarter growth of 3%. Our sanctioned corporate loan book has increased to 1.78 lakh crore. All this put together, I see good loan growth happening for the bank.

NII remained flat compared to last year. What is the reason?