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Sticky deposit costs may delay NIM recovery
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Punjab National Bank — Q4 FY26
Punjab National Bank delivered a strong Q4 FY26 with net profit of ₹5,225 crore (+14.4% YoY) and operating profit of ₹7,500 crore (+10.7% YoY).
bullish
high
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Punjab National Bank delivered a strong Q4 FY26 with net profit of ₹5,225 crore (+14.4% YoY) and operating profit of ₹7,500 crore (+10.7% YoY). Credit growth was robust at 12.7% YoY (15% ex-IBPC), driven by RAM segments (retail +18.2%, MSME +19.9%, agri +16.2%). Asset quality improved sharply with GNPA at 2.95% (vs 3.95% a year ago) and PCR at 97.14%. NIM compressed to 2.47% due to sticky deposit costs and full-quarter impact of the December rate cut, but management guided NIM recovery to 2.6-2.7% for FY27, supported by repricing of high-cost deposits and a shift toward higher-yielding RAM loans. Key risks include elevated deposit rates persisting and potential stress from West Asia exposure, though management downplayed near-term impact.
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Gross NPA Ratio
2.95%
-100bps YoY
Improved from 3.95% in March 2025, reflecting sustained asset quality focus.
RAM Loan Growth (ex-IBPC)
18.2%
+18.2% YoY
Retail advances grew strongly, driving overall credit momentum.
SMA 0-2 Ratio
3.30%
N/A
Lowest ever SMA book at ₹41,534 crore, indicating minimal near-term stress.
Digital Loan Sanctions (Q4)
₹20,873 crore
N/A
Sanctioned to 4.8 lakh customers; every third loan now digitally originated.
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Guidance and risk preview
Global NIM expected to improve from Q4 FY26 level of 2.47% to 2.6-2.7% in FY27, driven by deposit repricing and RAM mix shift.
Despite repricing of high-cost deposits, incremental deposit rates remain elevated, potentially capping NIM improvement.
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