PNB Q2 Profit Rises 12.8% to ₹5,532 Crore; Gross NPA Eases to 2.55%

State-owned bank Punjab National Bank earned a 12.8% higher net profit of Rs 5,532 crore in the quarter ended September of FY27 compared to a year ago. The bank said this is the highest quarterly profit it has ever made in its books.

Net interest income increased to Rs 11,601 crore in the quarter from Rs 10,468 crore in the year-ago period. Operating profit went up by 4.2 percent to Rs 7,532 crore. Total income for the quarter increased 5.4% to ₹38,185 crore, according to the bank’s results.

Asset quality improves, margins widen

It’s Gross NPA reduced to 2.55% in Sept quarter as compared to 3.45% YoY and 2.78% in previous quarter. While Net NPA came down to 0.25% from 0.36% YoY. Gross NPA stood at Rs. 34190 cr against Rs. 40343 cr.

The provision cover ratio including technical write off was 97.32%. The slippage ratio, however, inched up to 0.77% from 0.71% a year ago.

Global net interest margin improved to 2.58% from 2.50% in the preceding quarter. Return on assets was steady at 1.05%, while the capital adequacy ratio rose to 17.95% from 17.19%.

Global advances grew 14.7% to ₹13.41 lakh crore, outpacing a 9.9% rise in global deposits to ₹17.77 lakh crore. Total global business stood at ₹31.18 lakh crore, and the credit-deposit ratio climbed to 75.5% from 72.3%.

Retail advances, excluding inter-bank participation certificates, grew 16.3%. Vehicle loans rose 29.6% to ₹38,234 crore, MSME advances 19.8% to ₹2,14,619 crore and agriculture loans 18.1% to ₹1,71,156 crore. CASA deposits increased 7.3% to ₹6,25,945 crore, accounting for 36.6% of total deposits.

Treasury income dropped to about ₹750 crore from ₹1,716 crore a year earlier, weighing on headline operating profit. Excluding treasury gains and recoveries from written-off accounts, core operating profit rose 29.4%, ANI reported.

No rush to raise deposit rates

The results come days after the Reserve Bank of India raised the repo rate by 25 basis points to 5.5%. Chandra said the bank was “not in a hurry” to raise deposit rates as it was comfortable with its funding position. He added that the rate hike could lift margins by about 6–7 basis points in the October–December quarter.

PNB said it mobilised $2.7 billion through a foreign currency deposit campaign against a target of $2.5 billion. The funds were used to replace higher-cost deposits and certificates of deposit.

PNB shares closed 1.09% higher at ₹116.30 on the NSE on Friday.

Looking ahead, the bank has raised its FY27 credit growth guidance to 13–14% from 12–13% earlier, citing demand from retail, agriculture and MSME borrowers. Chandra said the current credit-deposit ratio leaves room to expand lending even if deposits grow at 8–9%. Investors will watch whether margin gains from the rate hike offset weaker treasury income in the second half of the year.