Punjab National Bank’s fiscal second-quarter net profit rose 14% to Rs 4,904 crore from Rs 4,303 crore a year ago, amid asset quality improvement and steady business growth.

The state-owned lender’s net interest income (NII), however, remained almost flat at Rs 10,469 crore in the September quarter, compared to Rs 10,517 crore in the same period of the previous year.

The net interest margin (NIM) was at 2.60% as on 30 September 2025 compared to 2.92% a year ago.

Total interest income rose 6.7% to Rs 3,187 crore from Rs 2,987 crore. 

Operating profit expanded 5.5% year-on-year to Rs 7,227 crore in the quarter ended September 2025.

Bad loans

The bank’s asset quality improved, with gross non-performing assets (NPAs) for the second quarter of FY26 standing at 3.45% compared to 4.48% a year ago and 3.78% in the previous quarter.

Net NPA was at 0.36% in the July-September quarter versus 0.46% a year ago and 0.38% in the preceding June quarter.

Fresh slippages stood at Rs 1,955 crore, down from 2,181 crore in September 2024. The slippage ratio was at 0.71% as on 30 September 2025 compared to 0.89% in the September quarter of 2024. 

Recovery from bad loans was at Rs 3,920 crore in the quarter ended September 2025, down from Rs 4,891 crore in the same quarter of the previous year. For the first half of the current fiscal, recovery was at Rs 6,806 crore compared to Rs 7,525 crore in the year-ago period.

The provision coverage ratio improved to 96.91% from 96.67% a year earlier.

Total biz

The bank’s global business jumped 10.6% year-on-year to Rs 27.87 lakh crore, driven by double-digit growth in deposits as well as loans.

Domestic business rose 10.5% to Rs 26.82 lakh crore from Rs 24.28 lakh crore a year ago and up 2.5% from Rs 26.17 lakh crore in the preceding quarter.

Loan growth

The lender's global advances logged a growth of 10.1% to Rs 11.70 lakh crore in the September quarter versus Rs 10.62 lakh crore in the earlier year, and a 3.5% quarter-on-quarter increase from Rs 11.30 lakh crore. 

Domestic loans jumped 10.5% to Rs 11.18 lakh crore from Rs 10.11 lakh crore in the same period last year, and 3.6% higher from Rs 10.79 lakh crore in the preceding quarter.

The RAM (retail, agriculture and MSME) portfolio grew 12.7% YoY to Rs 6.35 lakh crore as of 30 September 2025. Within this, retail loans grew 8.8% YoY to Rs 2.72 lakh crore, agriculture rose 13% to Rs 1.84 lakh crore and MSME expanded by 18.6% to Rs 1.79 lakh crore.

The RAM share in the total loan mix was 56.8% as on 30 September 2025, up from 55.8% a year ago.

The corporate loan segment grew 7.9% YoY to Rs 4.82 lakh crore as on September 2025.

Deposits

The bank’s global deposits rose 10.9% to Rs 16.17 lakh crore from Rs 14.58 lakh crore a year ago, and 1.7% higher quarter-on-quarter from Rs 15.89 lakh crore in June 2025. 

Domestic deposits stood at Rs 15.64 lakh crore in the September quarter, up 10.4% from Rs 14.16 lakh crore and 1.7% from Rs 15.37 lakh crore in the preceding quarter.

The low-cost CASA (current account savings account) share in total deposits stood at 37.29% as on 30 September 2025, down from 39.31% a year ago. In the preceding quarter, it was lower at 36.99%. 

CD ratio

The bank's credit-to-deposit ratio stood at 72.33% as of September 2025, compared with 72.82% a year earlier and 71.09% a quarter ago.

Digital initiatives

Digital banking initiatives made strong progress in the September quarter, accounting for almost 95% of the bank’s total transactions in Q2 of FY26. The total amount sanctioned and disbursed through digital lending journeys crossed Rs 7,648 crore in this quarter. 

The number of digital transactions rose 31% year-on-year to 313 crore, UPI transactions through PNB One grew 53% and WhatsApp banking users nearly doubled to 83.4 lakh as of 30 September from 43.5 lakh in the same period a year earlier.

Guidance

The bank has guided for 11-12% credit growth for FY26, and achieved 10.1% growth during the first half of the current fiscal. 

On the deposit front, the first half growth has been 10.9%, as against the full-year guidance of 9-10%.

The bank’s NII and NIM stood at 0.3% and 2.65% in the first six months of FY26, as against a guidance of 7% and 2.8-2.9%, respectively, for the full-fiscal.

Total recovery stood at Rs 6,806 crore while the target for FY26 is Rs 16,000 crore.