Punjab National Bank (PNB) reported a 12.8% year-on-year increase in net profit to ₹5,532 crore for the quarter ending September 30, 2026. The growth was driven by healthy expansion in advances and a significant reduction in provisions for potential losses. Investors should continue monitoring the bank's ability to manage new loan slippages, as the rate at which good loans turn bad saw a slight increase during the quarter.
Punjab National Bank (PNB) has delivered a steady performance in the second quarter of the current financial year, ending September 30, 2026. The public sector lender reported a net profit of ₹5,532 crore, representing a 12.8% increase compared to the ₹4,904 crore profit recorded in the same period last year. Total income for the quarter reached ₹38,185 crore.
The primary driver for this profit growth was a significant reduction in provisions, which is the money banks set aside to cover potential losses from bad loans. PNB’s provisions and contingencies fell sharply to ₹97 crore, down from ₹643 crore in the same quarter of 2025. This indicates a stronger portfolio quality compared to the previous year, which directly helped boost the bottom line.
Asset quality metrics showed broad improvement. The bank’s gross non-performing asset (GNPA) ratio, a measure of bad loans as a percentage of total advances, dropped to 2.55% from 3.45% in the previous year. The net non-performing asset (NPA) ratio also moderated to 0.25%, indicating that the bank has been effectively cleaning up its balance sheet. However, investors should note that the slippage ratio, which tracks how many good loans turn into bad loans, saw a slight uptick to 0.77%. This suggests that while overall quality is better, the bank needs to remain careful about fresh loan generation.
On the business side, PNB saw robust activity. Its global business operations grew by 11.9% to reach ₹31.18 lakh crore. Advances, or the money lent to customers, grew at a faster pace of 14.7% to hit ₹13.41 lakh crore, while total deposits rose by 9.9% to ₹17.77 lakh crore. This resulted in a credit-deposit ratio of 75.5%, showing that the bank maintains a balanced approach to raising deposits and distributing loans.
Profitability was further supported by a marginal improvement in the global net interest margin (NIM) to 2.58%. The NIM is the gap between the interest a bank earns on loans and the interest it pays to depositors, and a rise generally indicates better efficiency in banking operations. The bank also remains well-capitalized with a capital to risk-weighted assets ratio (CRAR) of 17.95%, providing a comfortable capital cushion for future business expansion.
The key monitorable for investors moving forward will be the bank's ability to maintain asset quality while aggressively growing its loan book. While the drop in provisions significantly helped earnings this quarter, the slight rise in the slippage ratio will be a point to watch in upcoming results to ensure that fresh bad loans do not rise significantly.