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Informist, Thursday, Jul. 16, 2026

By Priyasmita Dutta

NEW DELHI – Punjab National Bank's net profit for the June quarter is expected to almost triple on year due to an extraordinarily low base. However, the net profit is likely to fall sequentially owing to a slowdown in credit growth and a rise in provisions, according to brokerages tracking the lender. To note, both credit and deposit growth during the quarter are seen below the systemic average.

The country's second-largest public sector bank by deposits is estimated to post a net profit of INR 47.41 billion for the June quarter, according to the average of estimates from five brokerages. This will be up 183% on year but down over 9% from the March quarter, when the bank reported a profit of INR 52.25 billion. In the June quarter of the financial year 2025-26 (Apr-Mar), PNB shifted to a lower tax regime that led to a one-time charge of INR 33.24 billion. Following this, its net profit for Apr-Jun last year tanked to INR 16.75 billion. 

The lowest estimate for net profit for the reporting quarter is INR 45 billion from JM Financial Institutional Securities Pvt. Ltd. and the highest estimate is INR 51.93 billion from Elara Securities (India) Pvt. Ltd. JM Financial expects the bank's pre-provision profit to rise 1.7% on year to INR 70.80 billion for the quarter, while Elara Securities projects 10% on-year increase to INR 78.07 billion. 

PNB's global advances rose 13% on year to INR 12.75 trillion as on Jun. 30, according to provisional data from the bank. Global deposits grew at a much slower pace of around 9% to INR 17.25 trillion. Domestic advances were up 12% on year at INR 12.06 trillion and domestic deposits grew 9% on year to INR 16.70 trillion, the bank had said. The PSU bank's business growth was slower than its peers. The Reserve Bank of India's latest data showed loans of all scheduled commercial banks grew nearly 19% on year as on Jun. 30 and deposits rose over 13%.

PNB's loan growth during the June quarter will be led by the corporate and micro, small, and medium enterprises portfolio, with retail loans expected to lag, according to Motilal Oswal Financial Services Ltd. 

While the bank's credit and deposit growth during the quarter were lower than the industry average, they were in line with its projection for FY27. The bank's management had said in April that PNB's advances are seen growing 12-13% in FY27, while deposits are seen growing 9-10%. 

The bank's global advances had risen 13% on year to INR 12.59 trillion as on Mar. 31, higher than the bank's credit growth guidance of 11-12% for the year. Global deposits, on the other hand, were up 9% at INR 17.11 trillion as on Mar. 31, in line with the 9-10% guided by the bank. 

The bank's net interest income for the June quarter is seen rising just 1% on year to INR 106.82 billion, according to the average of five estimates. Sequentially, the net interest income is seen up nearly 3%. "We expect NII (net interest income) to improve marginally and the margins to remain flattish (around 1 basis point higher) QoQ," brokerage SMIFS Ltd. said. Motilal Oswal also expects the net interest margin to inch up 4 bps sequentially. Kotak Institutional Equities and JM Financial, however, see the net interest margin declining 4 bps sequentially. The bank's domestic net interest margin for Jan-Mar was 2.61%, and the global net interest margin was 2.47%. 

The bank's bottom line for the June quarter is also seen impacted by a sharp rise in provisions. According to SMIFS, Motilal Oswal, and JM Financial, the bank's provisions are expected to rise 204-280% higher on year to INR 10 billion–INR 12.3 billion.

The bank is also expected to maintain an overall floating provision of around INR 90 billion for transition into the RBI's expected credit loss norms that will kick in from April 2027. The RBI's norms on the expected credit loss framework mandate banks to set aside more funds for potential bad loans. It also mandates banks to classify non-performing financial assets into three categories based on the period for which the asset has remained non-performing and the "realisability of the dues", while continuing to apply existing rules for classifying non-performing assets.

"Credit cost outcome will depend on the extent of buffer creation for ECL and management discretion of reversing buffer provisions," Kotak said, projecting credit cost at 0.08% for the June quarter, lower than 0.14% in the trailing quarter and 0.12% in the year-ago quarter.

That said, all brokerages expect the Delhi-based bank's slippages to remain low during Apr-Jun. Motilal Oswal said the PSU lender's gross NPA ratio is seen improving to 2.8% in the reporting quarter from 3% in the March quarter and 3.8% in the year-ago quarter. The net NPA ratio is seen flat sequentially and slightly better than a year ago at 0.3%. 

Punjab National Bank will detail its financial results for the June quarter Saturday. At 1315 IST, shares of the bank traded at INR 105.15 apiece on the National Stock Exchange, marginally down from Wednesday. Since reporting its March quarter results on May 5, the stock is down 2%. 

Of the eight brokerage reports on the bank available with Informist, five have a "buy" call on the stock with an average target price of INR 131 per share, over 28% higher than its current market price. One brokerage has a "hold" rating, and two have a "sell" call.

Following are the June quarter earnings estimates for PNB from five brokerages in descending order of the estimate of net profit in INR billion:

End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Shubhayan Bhattacharya

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