Athira Sethu
Kochi, 19 October 2026
Public sector lender, Punjab National Bank (PNB) remained in focus on Monday after bank’s strong show in Q2 of FY27. The profit for the September quarter of Punjab National Bank (PNB) rose by 12.8%. The profit of the bank was recorded at ₹5,532 crore against ₹4,903 crore in the corresponding quarter last year.
The rise in the net profit of the bank was primarily driven by lower money set aside to provide for loan losses.
1. Profit & Income
The net interest income (NII) of PNB rose by 10.8% to ₹11,601 crore from ₹10,468 crore last year. The income is obtained from the difference in interest on loans and deposits of the bank.
On the other hand, the other income of the bank fell by 17% to ₹3,600 crore from ₹4,342 crore.
2. Improvement in Loan Quality
There has been an improvement in the quality of assets of the bank during the September quarter.
- Gross NPA: Dropped to 2.55% from 2.78% in June.
- Net NPA: Dropped to 0.25% from 0.28% in June.
NPA stands for Non-Performing Asset which means that the loan of a borrower in which there have been no payments for a particular period of time.
However, there have been fresh loan defaults worth ₹2,395 crore as compared to ₹2,080 crore in the previous quarter.
4. Interest Margin and Cost of Funds
The NIM of PNB domestically has seen an increase of 2.74% from 2.72% of the previous year.
Net Interest Margin indicates the earnings that the bank has from its loan business in comparison to its interest bearing assets.
The cost of funds of PNB saw a drop from 4.57% of last year to 4.34%. It signifies the cost of funds from various sources including deposits.
5. Performance Relative to Objectives
During the first half of the financial year, the performance of PNB was as follows:
- Loan Growth – 14.7% higher than its target of 12-13%.
- Deposit Growth – 9.9% in line with its target of 9-10%.
- NII Growth – 6.4% lower than its target of 7%.
- Operating Profit Growth – 5.2% lower than its target of 9-10%.
- Loan Recoveries – ₹5,594 crore against its yearly target of more than ₹13,000 crore.
- Credit Cost – 0.25% lower than its target of 0.4%.
- Gross NPA – 2.55% higher than its target of less than 2.5%.
- Net NPA – 0.25% inline with its target of less than 0.3%.
6. Share Price Performance
PNB shares have gained around 8% to hover around ₹122 level on Monday as investors cheered the public sector lender’s strong financial results.
PNB recorded higher earnings and faster loan growth along with improving loan quality for the September quarter. The reduction in provisioning was also one factor behind the profit increase.
Nonetheless, PNB’s operating profit and core income growth were below their targets for the first half of the financial year. The number of loan defaults was also higher than last quarter.
Thus, PNB has shown improvements in terms of profit and lending, although it needs to do better in the area of operating profit.
