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October 22, 2025 at 6:36 AM IST
Punjab National Bank reported a strong rise in September quarter profit, supported by steady income growth and lower tax expenses, even as provisions jumped sharply.
India’s second-largest public sector lender posted a net profit of ₹49.04 billion for the July–September quarter, up 14% on year and over eight times higher than the previous quarter. The improvement was mainly due to a 67% fall in tax outgo to ₹16.80 billion from the June quarter, following its shift to the new tax regime.
The bank had taken a one-time tax charge of ₹33.24 billion in the previous quarter, leading to its first profit decline in 10 quarters. Under the new regime, domestic firms pay a 22% tax rate without deductions or exemptions. PNB expects to save around ₹7 billion per quarter in 2025-2026.
Provisions more than doubled on year to ₹6.43 billion as the bank created ₹700 million of floating provisions. As of September 30, total floating provisions stood at ₹8.20 billion.
Gross non-performing assets improved by 103 basis points on year to 3.45%, while net NPAs fell 10 bps to 0.36%. The provision coverage ratio increased to 96.91%.
Operating expenses dropped nearly 8% on year to ₹75.84 billion, driven by a 17.45% fall in employee costs to ₹47.47 billion. Other operating expenses rose 14% to ₹28.37 billion but were down 21% sequentially.
Other income declined 5% on year to ₹43.42 billion, while total income rose 5% to ₹362.14 billion. Income from investments climbed 11% to ₹85.41 billion. Net interest income was flat at ₹104.69 billion, with the global net interest margin easing to 2.60% from 2.70% a quarter ago.
Global advances grew 10% on year to ₹11.70 trillion, led by 18.6% growth in MSME loans. Global deposits increased 11% to ₹16.17 trillion, with term deposits up 14.7% and CASA deposits rising nearly 5% to ₹5.83 trillion. The CASA ratio improved 30 bps to 37.29%.
The global cost of funds eased to 4.58% from 4.70% a quarter ago, while the cost of deposits fell to 5.18%.
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