PNB Q3 profit climbs 13% to Rs 5,100 crore on decline in bad loans

New Delhi: State-owned Punjab National Bank (PNB) on Monday posted a 13 percent improvement in net profit to Rs 5,100 crore for the third quarter ended December 2025 on account of a decline in bad loans.

The second-largest public sector lender had earned a net profit of Rs 4,508 crore in the same quarter a year ago.

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

This is the highest-ever quarterly profit for the bank, and it aims for an excess of Rs 5,000 crore bottom line every quarter, PNB MD and CEO Ashok Chandra said during a media interaction.

The total income increased to Rs 37,253 crore from Rs 34,752 crore a year ago, PNB said in a regulatory filing.

Interest income during the quarter also rose to Rs 32,231 crore from Rs 31,340 crore.

However, net interest income (NII) fell to Rs 10,533 crore in Q3 FY26 from Rs 11,032 crore in Q3 FY25, a decline of 4.5 percent.

During the period, the operating profit rose to Rs 7,481 crore compared to Rs 6,621 crore at the end of the third quarter of the previous financial year.

On the asset quality front, the bank's gross non-performing assets ratio moderated to 3.19 percent from 4.09 percent a year ago.

Similarly, net NPAs, or bad loans, slipped to 0.32 percent from 0.41 percent at the end of the third quarter of the last fiscal.

Despite a fall in the NPA ratio, provision against bad loans increased threefold to Rs 1,341 crore from Rs 318 crore a year ago.

Clarifying the issue, Chandra said the increase is on account of an additional provision of Rs 955 crore for meeting ECL guidelines that would kick in from April 1, 2027.

With regard to recovery from the technically written-off account, Chandra said it has doubled to Rs 1,956 crore against Rs 823 crore in the year-ago quarter due to recovery in one big account.

Asked about exposure in the Vodafone account, he said PNB has exposure of Rs 300 crore, but no fresh lending has been done.

The net interest margin is expected to be in the range of 2.8-2.9 percent during the current financial year.

Provision Coverage Ratio (including Technically Written Off) improved to 96.99 percent as of December 31, 2025, from 96.77 percent a year ago.

Its total business grew 9.5 percent to Rs 28,91,528 crore from Rs 26,39,991 crore.

Deposits registered a growth of 8.5 percent to Rs 16.60 lakh crore, while advances increased by 10.9 percent to Rs 12.31 lakh crore as of December 31, 2025.

Return on Assets (RoA) improved to 1.06 percent during the quarter from 1.03 percent in Q3 FY25.

Capital Adequacy Ratio also increased to 16.77 percent against 15.41 percent in December 2024.

During the three quarters, PNB reported a net profit of Rs 11,679 crore compared to Rs 12,063 crore in the nine-month period of the previous year.

(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.)