Punjab National Bank (Photo | EPS)
Punjab National Bank (Photo | EPS)

PNB likely to reduce stake in UTI AMC, Canara HSBC OBC Life in FY23

The bank holds 23% in Canara HSBC OBC Life Insurance and 15% in UTI Mutual Fund.

Punjab National Bank (PNB) is planning to sell a part of its stakes in UTI Mutual Fund and Canara HSBC OBC Life Insurance in 2022-23 as part of its non-core asset monetisation plan, MD and CEO of the bank Atul Kumar Goyal said in an interaction with the media on Thursday.

The bank holds 23% in Canara HSBC OBC Life Insurance and 15% in UTI Mutual Fund. The government-owned banh had sold 3% of its stake in UTI Mutual Fund in October 2020, and raised Rs 180 crore.

PNB is required to bring down its stake in Canara HSBC OBC to below 10% in order to comply with the Insurance Regulatory and Development Authority of India (IRDAI) rule that no commercial bank should hold more than 10% stake in two life insurance companies simultaneously.

PNB also holds a 30% stake in PNB Metlife India Insurance Company. PNB came to hold 23% in Canara HSBC OBC after Oriental Bank of Commerce (OBC) was merged with PNB.

Goyal, however, said that the bank has no plans as of now to sell off its stake in PNB Metlife India Insurance, in which it holds 30%.

The MD and CEO said that the bank is confident of bringing down the gross non-performing assets (GNPA) of the bank to single digit in 2022-23. At the end of 2021-22, the bank GNPA was at 11.78%, down from 14.22% a year ago. Most of the bank's GNPAs were accounted for by agriculture (20.58%), MSME (21.31%) and corporate (8.51%) loans.

Goyal says the bank can achieve lower GNPAs by focusing on credit quality and containment in slippages.

The bank, which posted a 17.3% operating profit growth in the fourth quarter of 2021-22, has an aim of maintaining 15% growth (in operating profit) in 2022-23.

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The New Indian Express
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