As the new merger process over, PNB owned by the state is looking forward to completing the technology integration of Oriental Bank of Commerce and the United Bank of India with itself by the end of the current fiscal year, said by the head of the country’s second-largest lender. The merger of the Oriental Bank of Commerce and the United Bank of India with Punjab National Bank became effective from April 1.
“The outbreak of COVID-19 pandemic has delayed the process of integration by a couple of months. We had planned for May. Technology integration has many dimensions, for example, integration of ATM switches. We hope to complete that process by September,” S S Mallikarjuna Rao, PNB Managing Director told in an interview.
The integration of the core banking solution platform would take a slightly longer time as the merged entity had an older version of this platform, he said.
“We will complete Finacle (CBS) integration and … all surrounding technologies latest by March 2021… one bank will be migrated by December and shifting of second will be over before March,” he said.
With the completion of the merger, the bank now has about 11,000 branches, more than 13,000 ATMs, one lakh employees, and a business mix of over Rs 18 lakh crore. The total domestic business of PNB at the end of March 2020 stood Rs 11.81 lakh crore.
However balance-sheet wise, that Oriental Bank of Commerce and United Bank of India booked losses in the fourth quarter ended March 31, 2020, Rao said.
The losses were mostly due to bad loans, he said, without giving numbers as they have not been made public.
On the outlook for the current fiscal, Rao said aided by treasury income and core banking activities, PNB will earn moderate profit in the current fiscal.
For the fourth quarter ended March, the bank posted a net loss of Rs 697.20 crore. However, after a gap of two years, the Nirav Modi fraud hit a bank posted a profit of Rs 363.34 crore in 2019-20.
He also said that the bank has scaled down its loan growth target to 6 percent for the current fiscal due to the COVID-19 crisis.
However, he said, the bank has a treasury advantage due to a reduction in interest rates resulting in Rs 1,000 crore gain in the first quarter of 2020-21.
“We are confident that quarter-on-quarter, we can book moderate profits. We do not like to have higher profits because we want to strengthen the balance-sheet from 2020-21.
“We are very confident that we will be creating a better base for the bank not only for booking moderate profit in 2020-21 but also creating a robust situation for 2021-22,” he said.