More Stories

Informist, Tuesday, May 5, 2026

 

Please click here to read all liners published on this story

--PNB: Mindful of increase in cost-to-income ratio 
--PNB: Expect NIMs to improve going forward 
--PNB: Plan to open 250 more branches in FY27 
--PNB: Expect global NIMs to remain in range of 2.6-2.7% in FY27 
--CONTEXT: Comments from PNB mgmt in post-earnings press conference 
--PNB: Have not seen any impact of West Asia war on bank so far 
--PNB: Kept additional provision of INR 2.7 bln to tackle West Asia crisis 
--PNB: Can't comment on loan to Vodafone Idea; some discussions going on 
--PNB: See no challenges to capital, growth from expected credit loss norms 
--PNB: Not planning to raise capital in FY27

 

By Kabir Sharma and Shweta

 

MUMBAI – Punjab National Bank expects its net interest margin to improve even as it remained cautious on deposit costs and global uncertainties while outlining a steady outlook for the financial year 2026-27 (Apr-Mar) at a post-earnings press conference. The bank guided for a sequential uptick in margins, with the management indicating that the net interest margin is likely to see a quarter-on-quarter improvement.

 

The bank expects its global net interest margin to remain in the range of 2.6–2.7% in FY27, reflecting a conservative stance amid increased deposit rates and macroeconomic headwinds. The bank's management attributed the recent margin pressure to sticky deposit rates despite policy easing, but expressed the confidence that a combination of lower incremental deposit costs and improved yield on advances--driven by a higher share of retail, agriculture, and micro, small, and medium enterprise lending—would support the margins.

 

At the same time, the bank said it remains mindful of a potential rise in the cost-to-income ratio even as it continues to invest in expansion and technology to drive long-term growth. The state-owned bank said it plans to open 250 new branches in FY27, building on the 144 branches added in FY26, with a focus on the southern and western regions of the country to deepen its geographic footprint.

 

The lender is also sharpening its focus on high-yield segments such as retail, micro, small, and medium enterprises, and agriculture, which are expected to gradually increase their share in the loan mix and support profitability, the management said.

 

Addressing concerns around geopolitical crises, the bank said it has not seen any impact from the military conflict in West Asia so far on its balance sheet, either in terms of growth or in asset quality. However, it emphasised that it is monitoring the situation closely and remains in touch with clients engaged in the region.

 

As a precautionary measure, the bank has set aside an additional provision of INR 2.7 billion during the March quarter, taking its total floating provisions to over INR 20 billion to cushion against potential risks, including any fallout from the West Asia crisis or the upcoming expected credit loss framework.

 

On capital adequacy, the bank maintained that it is well placed to support growth and regulatory changes. The management said there are no concerns around capital or growth under the expected credit loss regime, citing comfortable capital ratios. The bank said it is not planning to raise capital in FY27 as it has adequate buffers to fund its expansion plans.

 

On its exposure to troubled telecommunications company Vodafone Idea Ltd., the management refrained from giving specifics, only noting that discussions are continuing and it would be premature to say anything.

 

For the March quarter, Punjab National Bank's net profit rose 14% on year to INR 52.25 billion. This was higher than INR 49.67 billion estimated by analysts. Sequentially, the bottom line rose 2.5%. Tuesday, its shares closed 0.7% lower at INR 107.89 on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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. 2026. All rights reserved.