Punjab National Bank reported its unaudited financial results for the quarter ended December 31, 2025, showing robust net profit growth despite pressure on core income metrics. The state-owned lender demonstrated mixed operational performance with improved asset quality but credit growth falling short of guidance targets.

Financial Performance Highlights

The bank delivered strong bottom-line growth in Q3FY26, though Net Interest Income faced headwinds amid margin compression and rising interest expenses.

Net profit grew 13.0% year-on-year to ₹5,100 crore, while also registering a 4.0% sequential increase from ₹4,904 crore in Q2FY26. However, Net Interest Income declined 4.5% to ₹10,533 crore as domestic net interest margins compressed by 49 basis points to 2.60%. Interest expenses rose faster at 7.0% compared to interest income growth of 2.8%.

Business Growth and Deposit Performance

Punjab National Bank's business metrics showed healthy expansion across key segments, with particularly strong performance in retail advances and MSME lending.

Global business expanded 9.5% year-on-year to ₹28,91,528 crore, driven by 11.0% growth in advances and 8.5% increase in deposits. CASA deposits grew 5.3% to ₹5,92,176 crore, with current deposits showing stronger momentum at 9.1% growth.

Segment-wise Advances Performance

The bank demonstrated strong traction in retail and priority sector lending, with core retail advances leading the growth trajectory.

Core retail advances expanded robustly by 18.9% year-on-year, with vehicle loans showing exceptional growth of 35.7%. Housing loans grew 14.5% to ₹1,27,364 crore, while MSME loans increased 18.1% to ₹1,88,209 crore, reflecting the bank's focus on priority sector lending.

Asset Quality and Credit Growth

Asset quality metrics continued their improvement trajectory, though credit growth remained below the bank's full-year guidance range.

Gross NPAs improved significantly to 3.19% from 3.45% sequentially and 4.09% year-on-year. Net NPAs declined to 0.32% from 0.36% in the previous quarter. The provision coverage ratio strengthened to 96.99%, up 22 basis points year-on-year. However, credit growth at 10.9% fell short of the bank's full-year guidance of 11-12%.

Profitability and Capital Metrics

Profitability ratios showed improvement while capital adequacy remained robust, supporting future growth initiatives.

Return on Assets improved to 1.06% from 1.03% in the corresponding quarter last year. Capital adequacy ratio strengthened to 16.77% from 15.41%, while the CET1 ratio increased significantly to 12.52% from 10.65%, providing adequate capital buffer for business expansion.

Punjab National Bank has delivered strong third quarter results, showcasing robust financial performance with significant improvement in both profitability and asset quality metrics. The public sector bank's latest quarterly results demonstrate continued progress in operational efficiency and risk management capabilities, with nine-month performance indicators showing the bank is on track to meet its full-year asset quality guidance.

Financial Performance Overview

The bank reported impressive growth across key financial metrics during the quarter. The comprehensive performance indicators reflect the institution's enhanced operational capabilities and improved asset quality management.

Asset Quality Performance vs Guidance

Punjab National Bank's nine-month asset quality metrics demonstrate strong progress toward achieving full-year targets. The bank's performance indicates effective credit risk management and recovery strategies are yielding positive results.

Quarterly Asset Quality Improvement

Punjab National Bank demonstrated significant improvement in asset quality parameters during the quarter. The bank's non-performing assets showed notable decline on a quarter-on-quarter basis, indicating enhanced credit risk management and recovery efforts.

Interest Income Growth

Punjab National Bank's interest income reached ₹32,200.00 crores in the third quarter, representing a 2.90% year-on-year increase from ₹31,300.00 crores in the corresponding quarter of the previous year. This growth in interest earnings demonstrates the bank's expanding lending portfolio and improved yield management strategies.

Strategic Progress Analysis

The combination of 2.90% growth in interest income and 13.30% year-on-year increase in net profit to ₹5,100.00 crores demonstrates Punjab National Bank's sustained financial recovery trajectory. The bank's nine-month GNPA of 3.20% shows it is approaching its full-year guidance of under 3.00%, while the NNPA of 0.32% remains comfortably within the under 0.35% target.

This performance trajectory indicates strengthened credit processes and enhanced recovery mechanisms. The dual achievement of profit growth and NPA reduction showcases the bank's effective balance between business expansion and risk management, positioning it favorably to meet its annual asset quality commitments.