PNB profit climbs 12.8%, credit growth outlook raised to 13-14%

The management expects global margins to reach around 2.7% by the end of FY27. Other incomes declined 17% on year to Rs 3,601 crore. The bank raised its credit growth outlook for FY27 to 13-14% from 12-13%, supported by a strong corporate loan pipeline and healthy demand across the retail, agriculture and MSME segments. “We earlier gave a credit growth guidance of 12-13% for the current financial year.

Now, I am expecting that to be somewhere around 13-14%,” MD and CEO Ashok Chandra said during the post-earnings media interaction. Despite the recent policy rate increase, PNB does not plan to immediately raise deposit rates, citing comfortable liquidity and adequate headroom for credit expansion. ‘We are not in a hurry to raise the deposit rate. As of now, we are quite comfortable,” the management said.

Global advances grew 14.7% year-on-year to Rs 13.41 lakh crore, while deposits increased 9.9% to Rs 17.77 lakh crore. Its credit-deposit ratio stood at 75.5%. The bank has a corporate credit pipeline of Rs 1.58 lakh crore. It expects retail credit growth to accelerate to 17-18% during the festive quarter. It is also planning a campaign to promote recurring deposits amid volatility in equity markets.

The gross non-performing asset ratio declined to 2.55% from 3.45% a year earlier, while the net NPA ratio improved to 0.25% from 0.36%. The management said it would strengthen monitoring and customer engagement, rather than curbing agricultural lending, despite concerns surrounding El Nino and rural cash flows. On the proposed insurance distribution regulations, the management expects a limited impact on profitability, given the relatively small contribution from bancassurance income.

It will assess the implications for its partnership with PNB MetLife once the regulations are finalised. During Q2, PNB made an additional provisioning of Rs 1,150 crore, taking the total floating provision to Rs 2,560 crore as on September 30. It will be used to strengthen its balance sheet ahead of the expected credit loss framework or to mitigate any adverse impact from the West Asia crisis.