In a restructuring exercise meant to make operations more efficient, Punjab National Bank (PNB) has identified 300 branches to either be merged with better run ones, or be relocated.
“PNB has identified 300 branches to either be merged with profitable ones or be relocated,” a person briefed on the development said on the condition of anonymity. The bank has also formed a group of senior officials to carry out a detailed study and flesh out strategies for branch network rationalization, reported Business Standard on Wednesday.
The panel will factor in business prospects, the surrounding competitive landscape, and the availability of the bank’s business correspondent (BC) network before deciding the fate of the 300 branches, the report added.
The country’s second-largest public sector lender has a customer base of 100 million. Since March, it has shut down 928 ATMs—it had 9,753 ATMs as of September end, down from 10,681 in March. The bank added nine branches to its network from April to June, but also closed six in the second quarter, taking the total to 6,940 till September end.
Last week, the bank said that September quarter net profit rose just 2% to Rs560.6 crore from a year ago, as provisions for bad loans increased.
The profit came on a 4% increase in interest and non-interest income to Rs14,205 crore.
A little more than a year ago, the lender made history after it recorded the biggest quarterly loss ever. Its gross bad loans came in at 13% of the loan book. This ratio has barely moved for the bank, which would mean the lender is a long way from setting its house in order. But PNB has been able to bring down fresh slippages to Rs8,449 crore in the September quarter from as high as Rs11,245 crore a year back. Its stressed asset ratio has also shown a fall to about 15% from 18%.
Given that its financials are improving, PNB is seen as a strong contender for a large capital infusion from the government.
Source: Mint