Punjab National Bank Q1: Profit More Than Doubles On Lower Provisions

Punjab National Bank's profit rose in the first quarter of fiscal 2025, beating analysts' estimates.

The public sector lender's standalone net profit rose 159% year-on-year to Rs 3,251.5 crore in the quarter-ended June, according to an exchange filing on Saturday. Analysts polled by Bloomberg had estimated a net profit of Rs 2,954.7 crore.

Net interest income, or core income, for the lender rose 10.2% year-on-year to Rs 10,476.3 crore. Other income for the lender increased 5.1% year-on-year to Rs 3,609.5 crore.

• Net profit up 159% to Rs 3,251.5 crore vs Rs 1,255 crore (YoY).

• Net interest income up 10.2% to Rs 10,476.3 crore vs Rs 9,504 crore (YoY).

• Gross NPA at 4.98% vs 5.73% (QoQ).

• NNPA at 0.60% vs 0.73% (QoQ).

Asset quality for the lender improved with gross non-performing asset ratio improving 75 basis points quarter-on-quarter to 4.98%. Net NPA, too, improved to 0.60%, compared to 0.73% in the previous quarter.

GNPA guidance for this year will be below 4%, said Atul Kumar Goel, managing director and chief executive officer of PNB, in a post results press conference.

Provisions for the quarter fell 70% year-on-year to Rs 1,312.3 crore. "...Rs 2,099 crore net of tax has been added in general reserve," Goel said.

Total Current Account Saving Account deposits for the bank increased to Rs 5.49 lakh crore, up 3.4% year-on-year. Here, current account deposits stood at Rs 64,702 crore and savings deposits were up 4.4% year-on-year to Rs 4.84 lakh crore.

Retail term deposits, however, grew 9.2% year-on-year to Rs 5.85 lakh crore.

While CASA is not a challenge for PNB, it is for banks, Goel told reporters. "...For growth in current accounts, we plan to provide our mobile app to corporates by September," he said.

The credit cost guidance has been revised to 0.5% from the previous 1%, he said.

Under advances, total retail advances rose 14.4% year-on-year to Rs 2.34 lakh crore. Housing loan portfolio grew 14.7% year-on-year to Rs 1.01 lakh crore and vehicle loan portfolio grew 26.9% year-on-year to Rs 21,726 crore.

The bank has guided for credit growth at 11-12% and deposit growth at 9-10%, said Goel. The lender aims to have 1% RoA by end of FY25, he said.

Responding to a question, Goel told reporters that the bank has transferred 14 accounts to National Asset Reconstruction Co. with Rs 3,778 crore outstanding. Of these, nine accounts worth Rs 1,549 crore are still under discussion.

During Q1, the bank redeemed Base III compliant tier II bonds of Rs 500 crore due to maturity. The bank will raise Rs 5,000 crore via QIP in the current quarter, Goel said.

The lender expects an impact of around 10% on the total LCR, as per revised Reserve Bank of India norms released recently.

The bank will indulge in infrastructure financing, however, in case there is an ALM mismatch, it would raise long-term bonds from the market to address this, Goel said.