PNB Q3 FY26: Profit Zooms 13%! CEO Reveals BIG Move for Future-Proofing

Mumbai: Punjab National Bank's third quarter earnings for FY26 reflect a focus on future-proofing the balance sheet alongside consistent operational performance. The bank's management, led by MD & CEO Ashok Chandra, held a detailed conference call, the transcript of which was filed with the exchanges today.

Financial Performance Snapshot:

Net Profit: Rs 5,100 crore, marking a 13.13% year-on-year growth.
Asset Quality: Continued improvement with Gross NPA at 3.19% (down from 4.09% YoY) and Net NPA at 0.32%.
Business Growth: Global advances grew 10.9% YoY to Rs 12.31 lakh crore, with a strong focus on Retail, Agri, and MSME (RAM) segments.

Strategic Highlight: Proactive Buffering for ECL Norms
A key strategic move discussed was the bank's decision to create additional floating provisions of Rs 955 crore in Q3, taking the total contingent provisions to Rs 1,775 crore. Management clarified this was a conscious, prudential measure to build a buffer ahead of the implementation of the Expected Credit Loss (ECL) framework, expected from April 2027.

"Since we had good profitability, we took a conscious decision to make this floating provision," stated Ashok Chandra. He estimated the total ECL impact over a five-year transition period at approximately Rs 9,000-10,000 crore and emphasized that the pre-emptive provisioning would minimize future earnings volatility.

Net Interest Margin (NIM) Dynamics
The bank's domestic NIM for the quarter stood at 2.65%. Management acknowledged pressure, attributing it to the transmission of past repo rate cuts to borrowers, while deposit rates were held steady to retain customer trust. A significant repricing of a large pool of past high-cost deposits is expected to be complete by May 2026, which should aid NIM stabilization and improvement thereafter.

Digital Momentum and Growth Initiatives
The bank reported robust digital adoption, with every third loan now being sanctioned through digital channels. Digital loans worth Rs 12,672 crore were sanctioned to over 3.18 lakh customers in Q3 alone. Other growth initiatives include the launch of new verticals for supply chain finance and cash management services.

Asset Quality and Recovery Focus
The bank maintained a strong recovery momentum of Rs 4,090 crore during the quarter, which was 2.2 times the fresh slippages of Rs 1,901 crore. The Provision Coverage Ratio (PCR) remained robust at 96.99%.

Guidance and Outlook
Management reaffirmed its full-year FY26 guidance, including credit growth of 11-12%, Gross NPA below 3%, and Net NPA below 0.35%. The focus remains on sustainable growth, improving operating efficiency, and strengthening the balance sheet for the long term.