PNB net profit rises 14% to Rs 4,904 crore as asset quality improves

MUMBAI: Punjab National Bank (PNB) reported a 14.0% year-on-year rise in net profit to Rs 4,904 crore for the second quarter ended September 30, 2025, driven by higher total income and improvements in asset quality. The state-owned lender’s operating profit rose 5.5% to Rs 7,227 crore.Total income grew 5.1% to Rs 36,214 crore, while net interest income fell 0.5% to Rs 10,469 crore as interest expenses rose 10.6% to Rs 21,403 crore, outpacing the 6.7% growth in interest income. The global net interest margin narrowed to 2.60% from 2.92%, but the annualised return on assets improved to 1.05% from 1.02%. Operating expenses declined 7.9% to Rs 7,584 crore.Asset quality showed marked improvement. The gross NPA ratio fell 103 basis points to 3.45%, and net NPA declined 10 bps to 0.36%. Provision coverage, including technical write-offs, rose 24 bps to 96.91%. Gross NPAs dropped Rs 7,239 crore to Rs 40,343 crore.PNB’s global business grew 10.6% to Rs 27,86,673 crore. Deposits rose 10.9% to Rs 16,17,080 crore, while advances increased 10.1% to Rs 11,69,592 crore. The retail, agriculture, and MSME segment expanded 12.7% to Rs 6,35,417 crore, with MSME advances up 18.6%, retail advances (excluding IBPC) up 18.1%, and agriculture advances up 13.0%.Capital ratios strengthened, with the CRAR rising 83 bps to 17.19% and the CET-1 ratio increasing to 12.75% from 11.59%. Productivity improved, with business per employee at Rs 27.62 crore and net profit per employee at Rs 19.97 lakh. Digital adoption accelerated, with total digital transactions up 31% to 313 crore, WhatsApp banking users nearly doubling to 83.4 lakh, and digital transactions now accounting for 94.97% of total transactions.PNB expects credit growth of 11%-12% for FY26 and aims to keep gross NPA below 3%. Total priority sector advances stood at 42.29% of ANBC, exceeding the 40% norm.