PNB Q1 profit slips 48% to Rs 1,675 crore on higher tax expenses

New Delhi: Punjab National Bank (PNB) on Wednesday reported 48 percent decline in standalone net profit at Rs 1,675 crore for the first quarter ended June as the lender migrated to new regime leading to higher tax expenses.

The state-owned bank had posted a net profit of Rs 3,252 crore in the year-ago period.

Total income in the quarter under review rose to Rs 37,232 crore, from Rs 32,166 crore, PNB said in a regulatory filing.

PSU Watch is now on Whatsapp Channels. Click here to join

The lender's interest income also increased to Rs 31,964 crore, from Rs 28,556 crore in the same quarter a year ago.

Net Interest Income (NII) increased to Rs 10,578 crore from Rs 10,476 crore in Q1 FY25.

During the period, operating profit of the bank hit a new high of Rs 7,081 crore, as compared to Rs 6,581 crore in the same quarter a year ago.

Speaking about quarterly numbers, PNB MD & CEO Ashok Chandra said tax expenses during the quarter more than doubled to Rs 5,083 crore as the bank switched to the new tax regime.

Asked if the bank would be able to surpass the profit earned in last financial year due to massive fall in first quarterly profit, Chandra said, the bank would remain at the same level but migration to new regime would lead to saving of about Rs 700 crore every quarter from now on.

Thus, it would lead to improvement in Return on Assets and other parameters every quarter and overall during the current financial year, he said.

The bank's asset quality showed improvement as gross non-performing assets (NPAs) declined to 3.78 percent of gross advances at the end of the June quarter, from 4.98 percent a year ago.

Similarly, net NPAs, or bad loans, declined to 0.38 percent, as against 0.6 percent in the year-ago period.

As a result, provisions and contingencies fell significantly to Rs 323 crore during the first quarter, as compared to Rs 1,312 crore in the same period a year ago.

Provisions for bad loans moderated to Rs 396 crore from Rs 792 crore earmarked in the same period in the previous financial year.

Provision Coverage Ratio (including Technically Written Off) improved by 98 bps to 96.88 percent as on June 2025 from 95.90 percent at the end of first quarter of previous financial year.

Speaking about slippage ratio, Chandra said it improved by 5 bps to 0.71 percent from 0.76 percent in June 2024.

In absolute term, fresh accretion to NPA was Rs 1,792 crore during the quarter as compared to Rs 1,653 crore in the same period a year ago.

However, he said, total recovery rose to Rs 3,356 crore, higher than the fresh slippages during the quarter.

Fee based income of the bank at Rs 2,250 crore for Q1 FY’26 was higher than from Rs 2,077 crore for Q1 FY’25, recording a growth of 8.3 percent, he said.

Net Interest Margin (NIM) moderated to 2.7 percent from 3.07 percent in the same quarter in the previous year.

NIM would be a challenge as 47 percent of the loans are linked to external benchmark, he said, adding, it will stabilise in this quarter and see improvement from third quarter onwards.

Total business of the bank grew by 11.6 percent to Rs 27,19,276 crore from Rs 24,36,929 crore as on June 2024.

Total deposits registered a growth of 12.9 percent to Rs 15,89,379 crore from Rs 14,08,247 crore at the end of first quarter of previous fiscal while total advances increased by 9.8 percent to Rs 11,29,898 crore as against Rs 10,28,682 crore.

Besides, he said, the board has approved capital raising plan of Rs 8,000 crore for the current fiscal.

Out of this Rs 1,000-1,500 crore would be raised in the second half of this fiscal.

(PSU Watch– India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy is now on Google News. Click here to follow. Also, join PSU Watch Channel in your Telegram. You may also follow us on Twitter here and stay updated.)