Punjab National Bank (PNB) posted its highest-ever quarterly net profit, taking it to Rs 5,100 crore for the three months to end-December. This was 13.1% more than Rs 4,508 crore the country’s second-largest public sector bank had reported a year ago. 

The profit would have been even higher but for an additional provision of Rs 955 crore for meeting expected credit loss (ECL) guidelines, mandated by the Reserve Bank of India (RBI) for all banks to transition over five years from 1 April 2027.

PNB’s December quarter provisions against bad loans rose to Rs 1,341 crore from Rs 318 crore a year ago, despite non-performing assets (NPA) improving in the December quarter.

Recovery in written-off accounts doubled to Rs 1,956 crore against Rs 823 crore in the year-ago quarter. 

PNB managing director and CEO Ashok Chandra said this was due to recovery in one big account, while in case of others it was below Rs 100 crore.

The lender’s total income rose to Rs 37,253 crore, up 7.2% from Rs 34,752 crore in the earlier year.

Interest income during the quarter also rose to Rs 32,231 crore, up 2.8% year-on-year from Rs 31,340 crore.

NII and NIM

The lender’s net interest income (NII) fell 4.5% to Rs 10,533 crore in the December quarter compared to Rs 11,032 crore a year ago.

Domestic net interest margin (NIM) narrowed to 2.65% as on 31 December 2025, from 2.72% a quarter ago and 3.09% a year ago.

The bank’s global NIM fell to 2.52% in Q3 of FY26 from 2.60% in Q2 and 2.93% a year ago.

Asset quality

The bank’s asset quality improved, with gross non-performing assets (NPA) declining to 3.19% in Q3 of FY26 compared to 3.45% in Q2 and 4.09% a year ago.

Net NPA stood at 0.32% as on 31 December 2025 compared to 0.36% in the previous quarter and 0.41% in Q3 of FY25.

Loan growth

The lender’s loan book grew 10.9% to Rs 12.31 lakh crore in the quarter ended December 2025 compared to Rs 11.13 lakh crore in the same period of the previous fiscal.

Retail advances grew 7.4% year-on-year to Rs 2.82 lakh crore, with home loan growing 14.5% to Rs 1.27 lakh crore and vehicle loan 35.7% to Rs 33,458 crore.

The MSME (micro, small and medium enterprises) rose 18.1% year-on-year to Rs 1.88 lakh crore while agriculture loans grew 9.8% to Rs 1.92 lakh crore.

The RAM (retail, agriculture and MSME) portfolio grew 11% to Rs 6.62 lakh crore as on 31 December 2025 compared to Rs 5.96 lakh crore a year ago.

The RAM share in the total loan mix stood almost flat at 56.7% in Q3 of FY26 from 56.8% a quarter ago. In the December quarter of 2025, it was at 56.3%.

The corporate and other loans segment grew 8.9% to Rs 5.05 lakh crore for the three months to end-December, compared with Rs 4.64 lakh crore in the year-ago period.

Deposit growth

Deposits grew 8.5% year-on-year to Rs 16.60 lakh crore as on 31 December 2025. This was led by term deposits, which grew 10.4% to Rs 10.68 lakh crore.

Low-cost CASA (current account savings account) deposits had a share of 37.1%, down from 38.1% a year ago and 37.3% a quarter ago. 

The credit-to-deposit (CD) ratio improved to 74.2% as on 31 December 2025, from 72.6% a year earlier and 72.3% a quarter ago