Punjab National Bank has provided updated guidance on both its deposit growth expectations and Net Interest Margin outlook. The bank has revised its Q4 deposit growth forecast to 8.5%-9% from the earlier projection of 9%-10%, while maintaining its FY26 NIM guidance at 2.80%-2.90% range with expectations to stay above 2.70%.

Revised Q4 Deposit Growth Projections

The bank has adjusted its deposit growth expectations for the current quarter, reflecting a more conservative outlook. The revised guidance shows a moderation from previous estimates as the bank recalibrates its growth trajectory.

FY26 NIM Guidance Maintained

Despite the deposit growth revision, Punjab National Bank continues to maintain its Net Interest Margin targets for FY26. The management remains confident in achieving the guided NIM range while ensuring margins stay above the established threshold.

Strategic Positioning

The revised deposit growth guidance demonstrates the bank's realistic approach to market conditions while maintaining confidence in its core profitability metrics. The unchanged NIM targets indicate management's belief in sustaining healthy margin levels despite the moderated deposit growth expectations.

This dual guidance framework provides stakeholders with updated expectations for both growth and profitability parameters, reflecting the bank's balanced approach to managing expansion while preserving margin quality in the evolving banking environment.

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.