Punjab National Bank (PNB) is set to cross its net profit guidance of Rs 6,000 crore for the current financial year. 

The state-run lender has already posted a profit of Rs 5,234 crore in the first nine months ended 31 December 2023, which is more than the Rs 3,348.45 crore it had reported for the entire previous fiscal.

The bank put up a stellar performance in the third quarter of the current fiscal ended December with standalone net profit rising 253% to Rs 2,223 crore from Rs 629 crore a year ago. 

Punjab National Bank managing director and CEO Atul Kumar Goel now expects the net profit in the current fiscal to end somewhere in the region of Rs 7,000-7,500 crore, up from Rs 6,000 crore he had guided earlier. 

The December quarter’s net profit was 26.6% higher than the Rs 1,756 crore the bank had posted in the prior three months. 

The surge in net profit for the third quarter was led by higher operating profit, lower provisioning for bad loans and better recoveries.

The bank’s operating profit in the December quarter was Rs 6,330.71 crore, up 10.75% from Rs 5,715.90 crore a year earlier. Total income rose to Rs 29,961.65 crore from Rs 25,722.40 crore.

Net interest income grew 12.3% year-on-year to Rs 10,293 crore. In the prior quarter, the bank reported an NII of Rs 9,923 crore.

The lender’s net non-performing assets (NPAs) ratio fell to below 1% for the first time and stood at 0.96% in the December 2023 quarter, improving from 3.30% a year ago.

Gross NPA ratio improved to 6.24% in Q3 FY24 from 9.76% in the year-ago period.

Provisions fell 41.8% to Rs 2,739 crore from Rs 4,713 crore. 

Provision coverage ratio (PCR) improved by 911 basis points year-on-year to touch 94.28% as of December 2023. 

The slippage ratio improved to stand at 0.81%, improving by 136 basis points on a year-on-year basis.

The bank's operating expenses declined to Rs 6,636 crore in Q3 FY24 from Rs 6,801 crore in Q3 FY23.

The lender’s loan book grew 12.90% to Rs 9,67,256 crore. The core retail loan portfolio grew 17.6% year-on-year to Rs 1,53,384 crore in Q3 FY24. The MSME segment increased by 15.4% to Rs 1,43,983 crore compared to Rs 1,24,728 crore in Q3 FY23.

Deposits grew slower than advances, registering a 9.35% year-on-year rise to Rs 13,23,486 crore as of December-end.

The credit cost improved to 1.26% in the December 2023 quarter from 1.87% in the same period last year.