PNB Housing Finance reported a 6% rise in net profit to ₹617 crore for the quarter ended September 2026. To combat rising borrowing costs, the company will raise retail and corporate lending rates by up to 20 basis points from November 1. The lender’s loan book grew 19% to ₹95,079 crore, while asset quality metrics showed improvement.
PNB Housing Finance reported a steady performance for the second quarter of the current fiscal year, with net profit rising by 6% to ₹617 crore. The growth in the bottom line was supported by a 15% increase in net interest income, which stood at ₹878 crore. This figure represents the core profit earned from the difference between the interest received on loans and the interest paid on borrowed funds. Additionally, the company saw a 36.7% boost in fee and commission income, reaching ₹130 crore, which provided further support to the overall financials.
The lender's total loan book expanded significantly, growing 19% year-on-year to reach ₹95,079 crore. Management highlighted an improvement in operational efficiency, with net interest margins—a key measure of profitability—improving by 17 basis points compared to the previous quarter to reach 3.67%. Asset quality also remained under control, as the company reported that gross non-performing assets, or the portion of loans that are not being repaid, fell to 0.91% from 1.04% in the year-ago period.
Looking ahead, the company is preparing to manage the impact of rising borrowing costs in the financial system. To protect its profit margins, PNB Housing Finance plans to implement a rate hike on November 1. Retail lending rates are set to increase by 10 to 15 basis points, while corporate lending segments will face a slightly higher adjustment of 15 to 20 basis points. While this strategy is intended to keep margins stable, investors should monitor whether these higher rates affect the company's ability to maintain its recent pace of loan growth in a competitive environment.
A notable shift is occurring within the company’s business mix. While PNB Housing Finance remains anchored in the retail lending space, the composition of its portfolio is changing. Housing loans now account for 65.1% of its retail advances, a decrease from 73% in the same period last year. This indicates a strategic shift toward other types of retail credit, which often carry different risk profiles. Investors may want to watch how this evolving portfolio mix impacts the company’s long-term asset quality and profitability. Future updates from the management regarding demand trends, the actual impact of the rate hike on loan volumes, and the performance of the non-housing retail portfolio will be important monitorables.