Punjab National Bank’s second-quarter profit rose 12.8% as stronger net interest income and sharply lower provisions outweighed an increase in fresh bad-loan additions.
Punjab National Bank reported a stronger second quarter, as higher core income and sharply lower provisions lifted profit even though fresh bad loans edged up.
According to the state-owned lender’s results for the quarter ended 30 September, standalone net profit rose 12.8% from a year earlier to ₹5,532 crore, up from ₹4,904 crore. Net interest income, the gap between interest earned and interest paid, increased 10.8% to ₹11,601 crore, while operating profit rose 4.2% to ₹7,532 crore. The bank also said its net interest margin improved to 2.58% from 2.50% in the June quarter, indicating a modest gain in lending profitability.
Asset quality improved over the quarter. Gross non-performing assets fell to 2.55% from 2.78% three months earlier, while net non-performing assets eased to 0.25% from 0.28%. Provisions dropped to ₹97 crore from ₹643 crore a year earlier, reflecting a steep decline in credit costs, and the bank’s provision coverage ratio climbed to 97.32%, according to reporting by Business Standard. Its capital to risk-weighted assets ratio stood at 17.95%, signalling a comfortable capital buffer.
Even so, fresh slippages moved higher. NDTV Profit reported that new additions to bad loans rose to ₹2,233 crore during the July-September period, compared with ₹1,996 crore in the previous quarter and ₹1,812 crore a year earlier. The increase suggests the clean-up in the loan book is continuing, but not without some pressure from newly impaired accounts.
The results point to a bank that is benefiting from steadier core earnings and a lighter provisioning burden, even as it manages pockets of stress in the loan portfolio. For lenders, the balance between improving margins, lower write-offs and rising slippages remains crucial, and PNB’s latest numbers suggest that balance is improving, albeit gradually.
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