Punjab National Bank (PNB) did a fantastic job in the first quarter of FY27, driving a 214% rise in net profit within a year of provisions. It also showed that net profit and asset quality were better, and operating profit was strong with stable margins as part of strong performance in the core banking operations of the state-owned lender.
PAT for the April-June quarter was ₹5,253 crore (a profit after tax) compared to ₹1,675 crore in the corresponding quarter of the previous financial year, according to the bank's exchange filing. The impressive earnings growth points to PNB's improving financial health and sustained recovery in its balance sheet.
Net Interest Income To Increase
PNB's net interest income (NII) was up 2% year on year at ₹10,798 crore from ₹10,578 crore in Q1 FY26. Although the growth was modest, it was in line with the rapid growth in the lending businesses of the bank.
The bank’s operating profit also rose 6% year-on-year to ₹7,519 crore, from ₹7,081 crore in the same quarter last year. Operating expenses fell 13% year-on-year to ₹7,613 crore, indicating cost efficiency.
Provisions Double
Despite the strong earnings, the bank significantly increased its provisioning. The provision rose to ₹792 crore as compared to ₹396 crore in the year-ago quarter. Higher provisions generally help to strengthen a bank’s balance sheet by adding buffers against future loan losses.
Although PNB had a higher provision, it still managed to post record profit growth, showing the resilience of the operating performance.
The asset quality is still getting better.
The asset quality was still improving, one of the main points of the quarter.
Gross NPA (GNPA) declined to 2.78%, down from 2.95% in the previous quarter. Net NPA (NNPA) improved slightly to 0.28%, compared to 0.29% earlier.
The improvement reflects the bank's continued focus on reducing stressed assets and strengthening credit quality.
Net Interest Margin and Slippages
As a result, PNB reported a domestic Net Interest Margin (NIM) of 2.64%, up 3 basis points quarter-on-quarter from 2.61%. But the margin was lower than 2.84% recorded in the same quarter last year, at which time interest rates were on an upswing.
Fresh loan slippages in the quarter were at ₹2,080 crore, up from ₹1,886 crore a year ago but much lower than ₹2,758 crore reported in the previous quarter.
FY27 Guidance
This year, we see good growth in all aspects of our business and expect that to continue to be the case.
PNB's FY27 Guidance:
- Net Interest Margin (NIM): 2.60%–2.70%.
- Net Interest Income Growth: ~7%.
- Credit Growth: 12%–13%.
- Deposit Growth: 9%–10%.
- Operating Profit Growth: 9%–10%.
- Gross NPA: Below 2.5%.
- Net NPA: Below 0.3%.
- Slippage Ratio: Below 0.9%.
Management is confident in the profitability and asset quality of the business and, therefore, keeps it profitable while maintaining asset quality.
PNB Share Price
Punjab National Bank shares finished up 0.52% at ₹105.77 on the NSE on Friday after opening higher than the Nifty 50 (1.09% higher).
Even with the latest quarterly performance, the stock declined 14.41% year-to-date and 7.05% over the past 12 months, which is in line with broader market sentiment in banking.
Overall, PNB's Q1 FY27 results indicate a strong turnaround with strong profit growth, disciplined cost management, and better asset quality. Investors will now be closely watching to see whether the bank can achieve its FY27 targets in a more macroeconomic and interest rate environment.
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