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The bank also expects agriculture priority-sector lending to maintain its growth momentum after recording 18 per cent growth, as it looks to sustain profitability and improve asset quality in the coming quarters.

“Three areas, retail is doing very well and core retail activity like housing, vacation, mortgage loans, education loan, that is growing at more than 16 percent and I am expecting that this being the festive season, a lot of activities will happen and somewhere around 17 to 18 percent growth should happen in the core retail segment,” Chandra said.

He further added that, “Agriculture priority sector, we are growing at 18 percent and the momentum will continue in this particular quarter also. MSME, we are growing at 20 percent and I'm expecting that in this quarter around 21 percent growth will happen”.

On the bank's overall performance, Chandra said PNB had reported strong growth, asset quality and profitability in every quarter over the past two years and expected the trend to continue. “I'm fully confident that this trend is going to continue in the coming quarters also. You will see the good growth happening across these sectors in the credit. Good growth is happening in the profitability and there will be further reduction in the gross NPA, net NPA,” he said.

PNB sanctioned corporate loans worth ₹2.5 lakh crore in the first two quarters of the current financial year, compared with ₹4 lakh crore during the entire previous financial year.Chandra said the bank was replacing lower-yielding advances with higher-yielding loans, keeping corporate loan-book growth at around 10-11 per cent despite a rise in sanctions.

The strategy helped improve net interest income, with domestic net interest margin (NIM) rising by more than 10 basis points and global NIM by 8 basis points during the quarter. On interest rate, Chandra said the latest 25-basis-point repo rate hike could have a positive impact of around 7 basis points on NIM.

He said lending and deposit rates would be reviewed by the bank's Asset Liability Committee (ALCO) in the coming months, while the RBI would decide on any further rate action based on inflation and growth trends.

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