Punjab National Bank reported a 12.8% rise in Q2 FY27 net profit to ₹5,532 crore, supported by higher interest income and improved asset quality. The bank does not plan to increase deposit rates immediately following the RBI’s repo rate hike.
Punjab National Bank (PNB) reported a 12.8% year-on-year increase in net profit to ₹5,532 crore for the second quarter of FY 2026–27, marking its highest quarterly profit to date. Improved interest income and stronger asset quality supported the bank’s performance.
The bank’s net interest income (NII) increased by 10.8% to ₹11,601 crore, compared with ₹10,468 crore in the corresponding quarter of the previous financial year. Operating profit rose 4.2% to ₹7,532 crore.
Asset Quality and Business Growth
PNB continued to report improvements in asset quality. The gross non-performing asset (GNPA) ratio declined to 2.55% from 2.78% in the preceding quarter, while the net NPA ratio improved to 0.25% from 0.28%.
The bank’s global advances grew 14.7% year-on-year to ₹13.41 lakh crore, while total deposits increased 9.9% to ₹17.77 lakh crore. Managing Director and CEO Ashok Chandra indicated that the bank could achieve credit growth of approximately 13–14% in FY27, above its earlier projection of 12–13%, supported by demand from retail, agriculture and MSME borrowers.
Deposit Rate Strategy and Interest Margins
PNB does not currently anticipate an immediate increase in deposit rates following the Reserve Bank of India’s 25-basis-point repo rate hike. According to Chandra, the bank’s credit-deposit ratio of approximately 75% provides adequate flexibility to support lending requirements despite deposit growth of around 8–9%.
The bank also expects the policy rate change to support its net interest margin (NIM), with a potential improvement of approximately 6–7 basis points in the October–December 2026 quarter. Global NIM had already increased to 2.58% in Q2 FY27 from 2.50% in the preceding quarter.
Operating Performance and Foreign Currency Deposits
The bank’s operating profit growth was partly affected by a decline in treasury income, which fell to approximately ₹750 crore from ₹1,716 crore in the corresponding quarter last year. However, core operating profit, excluding treasury income and recoveries from written-off accounts, recorded 29.4% year-on-year growth.
PNB also raised USD 2.7 billion through its foreign-currency non-resident deposit campaign, exceeding its target of USD 2.5 billion. The proceeds were used to replace comparatively expensive deposits and certificates of deposit. CASansaar
The quarterly results reflect growth in core banking income, improved asset quality and stronger credit demand, while the bank continues to assess deposit pricing in light of changing interest-rate conditions.