Whalesbook
Punjab National Bank (PNB) has announced a record net profit of ₹5,225 crore for the fourth quarter of fiscal year 2026, a significant 14.4% increase year-on-year. The bank also reported a substantial improvement in asset quality, with Gross Non-Performing Assets (GNPA) falling to 2.95%.
The bank's global business experienced robust expansion, growing by 10.7% to reach ₹29.7 lakh crore. Global deposits increased by 9.2% to ₹17.11 lakh crore during the quarter.
PNB demonstrated notable progress in reducing bad loans. Gross NPAs declined to 2.95% from 3.95% a year earlier, while Net NPAs fell to 0.29% from 0.40%. The bank maintained a strong Provision Coverage Ratio (PCR) of 97.14%, ensuring adequate provisioning.
Management is strategically shifting the bank's portfolio away from low-yielding exposure, including a reduction of ₹18,231 crore in International Banking and Portfolio Credit (IBPC) assets. The focus is now on the higher-margin Retail, Agriculture, and MSME (RAM) segments to enhance loan book yield.
Looking ahead to fiscal year 2027, PNB projects steady growth. Credit growth is guided between 12% and 13%, with Net Interest Income (NII) growth conservatively pegged at 7%. The bank expects its Net Interest Margin (NIM) to range between 2.6% and 2.7% for FY27.
However, margin expansion faces pressure from higher deposit rates and bond yields, leading to the revised NIM guidance. CASA (Current Account Savings Account) ratios have shown volatility, which could affect funding costs. Additionally, Special Mention Accounts (SMA) stand at ₹41,534 crore (3.30%), requiring continued monitoring.
In peer comparisons, State Bank of India reported a Q4 FY24 net profit of ₹20,698 crore and a GNPA of 2.1%. Bank of Baroda posted a Q4 FY24 net profit of ₹4,159 crore with a GNPA of 2.1%, while Union Bank of India's Q4 FY24 net profit was ₹3,700 crore, with GNPA at 3.18%.
Key metrics for PNB as of Q4 FY26 include a global business of ₹29.7 lakh crore and global deposits of ₹17.11 lakh crore. The bank's Capital Adequacy Ratio (CRAR) stood at 17.74%.
Going forward, investors will monitor PNB's success in increasing the share of RAM segments towards its 60% target. The bank's ability to manage deposit costs and improve NIMs amid competition is crucial. Further improvements in asset quality, particularly from MSME and agriculture renewals, will also be watched. Preparations for the implementation of Expected Credit Loss (ECL) provisioning norms and their potential impact on capital buffers are also key. Finally, the contribution of its branch expansion in South and West India to business growth will be observed.