State-run Punjab National Bank achieved a record quarterly net profit of over ₹5,500 crore for Q2 FY27, marking a 12.8% year-on-year increase from ₹4,904 crore in the corresponding quarter of the previous fiscal year. According to The Hindu BusinessLine, this growth was aided by healthy core income growth and a sharp decline in credit provisions, even as fresh slippages showed a marginal uptick. The profitability growth came despite a 17% year-on-year drop in other income to ₹3,600 crore from ₹4,342 crore in the same quarter last year. Managing Director and CEO Ashok Chandra noted that the bank is launching a special recurring deposit scheme to attract investors during ongoing stock market volatility, emphasizing it's the right time to provide safe returns to customers and depositors.
Net Interest Income (NII), the difference between interest earned and interest expended, grew 10.8% year-on-year to ₹11,601 crore from ₹10,469 crore in the year-ago period. As reported by CNBC TV18, Net Interest Margin (NIM), a key gauge of lending profitability, expanded by 8 basis points sequentially to 2.58%, up from 2.50% in the preceding June quarter. Operating profit for the quarter rose 4.2% year-on-year to ₹7,532 crore, against ₹7,227 crore reported in the same quarter last year. However, Chandra explained that the less than 5% growth in operating profit was mainly due to a ₹1,000 crore shortfall in treasury income, as treasury profit dropped to ₹753 crore this quarter compared to ₹1,769 crore in the same period last year. He noted that if treasury income was added back, operating profit would have crossed ₹8,500 crore.
Asset quality metrics strengthened significantly during the quarter, with bad loan ratios declining substantially year-on-year. According to The Hindu BusinessLine, Gross Non-Performing Assets (GNPA) moderated to 2.55% of gross advances at the end of September 2026, down from 3.45% a year ago. Net Non-Performing Assets (NNPA) fell to 0.25% at the end of September 2026, down from 0.36% at the end of September 2025. During the quarter, the bank made a floating provision of ₹125 crore, aggregating to ₹2,560 crore for the full year. The additional provision will help meet Expected Credit Loss (ECL) guidelines effective from April 1, 2026, and helped improve the Provision Coverage Ratio. In absolute terms, Gross NPA stood at ₹34,190 crore from ₹35,380 crore earlier, while Net NPA stood at ₹3,313.2 crore from ₹3,433.2 crore.
Looking ahead, Chandra indicated that the bank's credit growth is likely to reach 13-14% for the full year, exceeding their earlier guidance of 12-13% growth. He expects Net Interest Margin (NIM) to improve by 6-7 basis points during the ongoing quarter due to rate hikes, with the bank targeting a global NIM of 2.7% compared to the current 2.58%. For the whole year, the guidance for NIM remains at 2.6-2.7%. On funding, Chandra announced that the bank will raise $1 billion under its Medium-Term Note (MTN) Programme, waiting for an opportune time to mobilize the funds. The bank's global advances grew 14.7% year-on-year to ₹13.41 lakh crore, while global deposits saw growth of 9.9% year-on-year to ₹17.77 lakh crore.
The bank demonstrated strong deposit mobilization during the quarter, with significant growth across all deposit categories. According to ET Now, Savings Deposits increased to ₹5,42,893 crore, up 6.7% year-on-year, while Current Deposits increased to ₹83,053 crore, registering a 12% growth year-on-year. The CASA Deposits surged to ₹6.26 lakh crore, recording a 7.3% growth year-on-year, with the bank's CASA share standing at 36.6% as of September 2026. This strong CASA performance indicates improved low-cost deposit mobilization and supports the bank's funding cost optimization strategy.
For the first half of the financial year, PNB's credit growth stood at 14.7% year-on-year, higher than their guidance of 12% to 13% growth. Deposits have grown 9.9% from last year for the first half, which is at the higher end of the 9% to 10% range guided by management. However, Net Interest Income grew 6.4% during the first half, lower than the 7% guidance of the management, while operating profit growth of 5.2% is also lower than the guided range of 9% to 10%. The bank expects recoveries of over ₹13,000 crore during the financial year, of which it has managed to collect ₹5,594 crore during the first half of the year. As per CNBC TV18, Business Standard, and ET Now, shares of Punjab National Bank closed 1.09% higher at ₹116.30 on the NSE on October 16, reflecting positive market sentiment following the strong quarterly results.
