Earnings Review
PNB Q1 net profit nearly halves on one-time tax charge
This story was originally published at 17:07 IST on 30 July 2025
Register to read our real-time news.Informist, Wednesday, Jul. 30, 2025
Please click here to read all liners published on this story
--PNB Apr-Jun net profit INR 16.75 bln
--Analysts saw PNB Apr-Jun net profit at INR 40.87 bln
--PNB gross NPA ratio 3.78% as on Jun 30 vs 3.95% qtr ago, 4.98% year ago
--PNB Apr-Jun net profit INR 16.75 bln vs INR 32.52 bln year ago
--PNB net NPA ratio 0.38% as on Jun 30 vs 0.40% qtr ago, 0.60% year ago
--PNB Apr-Jun total income INR 372.32 bln vs INR 321.66 bln year ago
--PNB: Hold additional provision of INR 19.59 bln in 13 accounts on Jun 30
--PNB Apr-Jun provisions INR 3.23 bln vs INR 13.12 bln year ago
--PNB Apr-Jun NPA provisions INR 3.96 bln vs INR 7.92 bln year ago
--PNB Apr-Jun tax expenses INR 50.83 bln vs INR 20.17 bln year ago
--PNB holds floating provision of INR 7.5 bln on Jun 30 vs INR 1.5 bln yr ago
--PNB: Provision Coverage Ratio at 96.88% as on Jun 30
--PNB Basel-III capital adequacy ratio 17.50% as on Jun 30
--PNB: Incurred one-time cost of INR 33.24 bln on opting for lower tax regime
--PNB Q1 profit excluding one-time charge on tax regime change INR 49.99 bln
--PNB Apr-Jun net interest income INR 105.78 bln, up 1% on year
--PNB Apr-Jun global net interest margin 2.7%
--PNB Apr-Jun global net interest margin 2.7% vs 2.81% qtr ago
--PNB: Global deposits at INR 15.89 tln as on Jun 30, up 12.9% on year
--PNB: Global advances at INR 11.30 tln as on Jun 30, up 9.8% on year
--PNB Apr-Jun credit cost 0.14%, down 18 bps on year
--PNB Apr-Jun fresh slippages INR 17.92 bln vs INR 16.53 bln year ago
--PNB Apr-Jun cash recoveries INR 10.68 bln vs INR 11.96 bln year ago
--PNB Apr-Jun upgrades INR 5.94 bln vs INR 5.24 bln year ago
--PNB Apr-Jun loan write-offs INR 16.33 bln vs INR 51.15 bln year ago
By Sourabh Kumar
MUMBAI – Punjab National Bank's net profit for the quarter ended June almost halved from last year as the state-owned bank incurred a one-time charge of INR 33.24 billion because it opted for lower tax regime. If one excludes this one-time cost, the net profit of the bank would have been higher by over 50% on year.
The bank's net profit for the quarter fell to INR 16.75 billion from last year's INR 32.52 billion. Sequentially, the net profit was down around 63%. The bank's tax outgo for the June quarter was INR 50.83 billion, sharply up from INR 20.17 billion in the corresponding quarter of last year. The bank's bottom line was lower than the estimate of INR 40.87 billion.
"The Bank has evaluated the option of lower tax regime...based on that, the bank has decided to exercise the said option of lower tax rate with effect from FY 2025-26 (Assessment year 2026-27). While recognizing the provision for income tax for the quarter ended June 30, 2025, the deferred tax assets (net) have been remeasured based on the tax rate applicable as per new regime along with release of certain income tax provisions which are no longer required," the bank said in a notice to stocks exchanges. "The resultant impact is a one-time charge of INR 33.24 billion in the profit and loss account for the quarter ended June 30, 2025."
The bank's total expenses rose nearly 18% on year to INR 301.50 billion in the June quarter, whereas total income grew at nearly 16% on year to INR 372.32 billion. Apart from the higher tax outgo, rise in the bank's other operating expenses weighed on its profit. The other operating expenses rose almost 22% to INR 36 billion in the June quarter.
The bank's other income rose 46% to INR 52.68 billion, which supported its profit. The income under 'others' category of 'interest earned' surged over 300% on year to INR 8.37 billion. The bank also reported a 75.4% on-year fall in provision to INR 3.23 billion in the June quarter. The bank's provisions for non-performing assets halved to INR 3.96 billion in Apr-Jun. Punjab National Bank said it held an additional provision of INR 19.59 billion in 13 accounts as on Jun. 30. Moreover, it held a floating provision of INR 7.5 billion as on Jun. 30, sharply up from INR 1.5 billion last year. The bank reported a provision coverage ratio of 96.88% as on Jun. 30. This ratio includes technical written off accounts of Punjab National Bank. Excluding this, the provision coverage ratio was 90.32% as on Jun. 30, up from 88.43% last year.
Asset quality parameters of the bank improved, with the gross non-performing asset ratio improving to 3.78% as on Jun. 30 from 3.95% in the prior quarter and 4.98% last year. Net non-performing asset ratio also improved to 0.38% as on Jun. 30 from 0.40% a quarter ago and 0.60% year ago. The bank's Basel III capital adequacy ratio was 17.50% as on Jun. 30.
On the National Stock Exchange, shares of Punjab National Bank closed 1.1% lower at INR 108.10. The high for the day was INR 111.15 and the low was INR 107.61.
The slippage ratio of the bank improved 5 basis points year-on-year to 0.71% as on Jun. 30. The bank reported fresh slippages of INR 17.92 billion in Apr-Jun. While the slippages increased on a yearly basis, they were sharply down from the previous quarter's INR 29.04 billion. The slippages in the micro, small, and medium enterprises segment was the highest in the June quarter at INR 9.66 billion, rising 51.4% from last year. Slippages in the corporate sector were the lowest, falling 83% on year to INR 210 million. Retail segment slippages were down 5.9% on year to INR 4.63 billion.
The bank reported cash recoveries of INR 10.68 billion in Apr-Jun, down nearly 29% from the March quarter and only slightly down from last year. The bank upgraded non-performing accounts worth INR 5.94 billion in the June quarter, down 15.6% from a quarter ago but up 13% from last year. It wrote off non-performing assets to the tune of INR 16.33 billion in Apr-Jun, down 23% on quarter. On a yearly basis, they were down 68%.
The bank's global advances were up 9.8% on year at INR 11.30 trillion as on Jun. 30. Of these, domestic advances were INR 10.79 trillion, rising 9.6% on year. Advances to retail, agriculture, and micro, small, and medium enterprises stood at INR 6.11 trillion as on Jun. 30, rising 11.8% from last year. The bank's net interest income was up a mere 1% on year at INR 105.78 billion in the June quarter. The global net interest margin of the bank was 2.70% in Apr-Jun and the domestic margin was 2.84%. Both were down sequentially and on a yearly basis.
Credit cost of the bank fell 18 bps on year to 0.14% in the June quarter. The bank's global yield on advances was 8.14% and the domestic yield on advances was 8.28% in the June quarter. The bank's cost of funds was 4.7% in the June quarter for both domestic and global portfolios. Both of these fell sequentially but rose on a yearly basis.
Global deposits of the bank rose 12.9% on year to INR 15.89 trillion in the June quarter. Domestic deposits were INR 15.37 trillion in the June quarter, up 12.2%. The credit deposit ratio of the bank was 71.09% as on Jun. 30. The current account savings account deposits of the bank were up 3.6% at INR 5.69 trillion as on Jun. 30. The current account savings account deposit ratio was 36.99% as on Jun. 30, against 37.95% in the previous quarter and 40.08% last year. The bank's domestic cost of deposits was 5.35% in the June quarter, down 2 bps from the previous quarter but up 27 bps from last year. End
Edited by Ashish Shirke
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
