State-owned Punjab National Bank (PNB) on Saturday reported a 14% year-on-year increase in its net profit at Rs 4,903 crore for the second quarter (Q2) of FY26 following a Rs 639 crore write-back in provisioning of non performing assets. The bank’s net interest income (NII) reported a marginal fall to Rs 10,469 crore, down 0.5%, as against Rs 10,517 crore in Q2FY25. The bank exceeded Bloomberg estimates, with analysts expecting the profit for Q2FY26 to be Rs 4,419 crore on NII of Rs 10,496 crore.
This led to a fall in the bank’s domestic net interest margin (NIM) of 2.72% compared to 3.06% in Q2FY25. The global NIM also dipped by 32 basis points (bps) at 2.60% (2.92%).
Ashok Chandra, MD & CEO of Punjab National Bank, said, “Our robust recovery momentum and disciplined underwriting have enabled a significant write-back of provisions this quarter, reflecting the strength of our asset quality and governance reforms.” He expects NIM to improve from Q3FY26 onwards. “The slight decline in Q2 (12 bps in domestic NIM q-o-q) was due to the impact of a 100 bps repo rate cut and longer-tenure special deposits being repriced. With deposit repricing and CRR cuts underway, margins are expected to recover,” said Chandra, who remains focused on expanding RAM portfolio, deepening digital engagement, and sustaining profitability through operational excellence.
The gross non-performing asset (GNPA) ratio of the bank improved by 103 bps y-o-y to 3.45% as of September, from 4.48% in the year-ago period. The net non-performing asset (NNPA) ratio declined by 10 bps y-o-y to 0.36% in Q2, from 0.46% a year ago. The bank improved its return on asset (RoA) to 1.05% in Q2FY26 from 1.02% in Q2FY25.
The bank’s CASA (Current Account and Savings Account) deposits grew 4.7% y-o-y to Rs 5.83 lakh crore. As on September 30, the bank had 10,228 (10,159) domestic branches and 2 international branches.
PNB’s total retail credit increased by 8.8% y-o-y to Rs 2.72 lakh crore, up from Rs 2.5 lakh crore in Q2FY25. The bank’s core retail advances recorded 18.1% y-o-y growth.
Housing loans grew by 13% y-o-y to Rs 1.24 lakh crore from Rs 1.09 lakh crore in Q2FY25, while vehicle loans posted 31% y-o-y growth, reaching Rs 29,512 crore (Rs 22,543 crore in Q2FY25). Moreover, agriculture advances grew by 13% y-o-y to Rs 1.83 lakh crore (Rs 1.62 lakh crore in Q2FY25), and MSME advances increased by 18.6% y-o-y to Rs 1.79 lakh crore (Rs 1.51 lakh crore in Q2FY25).
RAM (retail, agriculture, and MSME) advances grew by 12.7% y-o-y to Rs 6.35 lakh crore as of September 30, up from Rs 5.64 lakh crore in the year-ago period. The credit-deposit ratio improved to 72.33% in Q2FY26, up from 71.09% in Q2FY25.
The CRAR (capital to risk-weighted assets ratio) improved by 83 bps to 17.19% in Q2FY26 to 16.36% in the year-ago period. Tier-1 capital improved to 14.41% (13.63%) with CET-1 at 12.75% for the quarter ended September 2025.
On the digital front, PNB registered a 31% growth in digital transactions to 3.13 billion in Q2FY26, from 2.39 billion in Q2 FY25. Additionally, the number of WhatsApp Banking users has nearly doubled y-o-y to 8.34 million during the quarter from 4.35 million in the year-ago period.
“Digital is no longer a channel, it’s our core growth engine. With 95% of transactions now digital, every fifth loan is disbursed through digital platforms. We are not just enhancing convenience, we are reshaping customer experience. Our focus is on building unified journeys, expanding CBDC adoption, and deepening financial inclusion across urban and rural India,” said Chandra.