Punjab National Bank Q3FY26 Results: Net profit rises 13%, asset quality improves; revenue and margins broadly in line with estimates

PNB Q3FY26 Results: State-owned lender Punjab National Bank (PNB) announced its Q3FY26 results on Monday delivering a strong December-quarter performance on the bottom line, with profit beating Zee Business estimates, aided by improving asset quality and controlled slippages. On a contrary, net interest income remained under pressure, in line with expectations of flat margins, prompting the stock to fall over 5 per cent in Monday's trade.

Profit beats estimates, operating performance improves

PNB reported a consolidated net profit of Rs 5,189.79 crore for Q3FY26, up 11.6 per cent year-on-year from Rs 4,648.60 crore. On a standalone basis, net profit rose 13.1 per cent YoY to Rs 5,100 crore, comfortably above the Zee Business estimate of Rs 4,780 crore.

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Operating profit before provisions and contingencies increased 13.8 per cent YoY to Rs 7,570.32 crore, while standalone operating profit stood at Rs 7,481 crore, reflecting steady operational traction.

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NII misses estimates as margins remain flat

Net interest income (NII) declined 4.5 per cent YoY to Rs 10,533 crore, coming in below the Zee Business estimate of Rs 10,840 crore and down from Rs 11,032 crore a year ago. The performance was in line with Zee Business expectations of largely flat margins during the quarter.

Provisions higher than expected

Provisions rose to Rs 630 crore during the quarter, higher than the Zee Business assumption of negative provisioning of Rs 285 crore YoY, indicating a more conservative provisioning approach despite improving asset quality.

Asset quality improves in line with estimates

PNB continued to report steady improvement in asset quality, broadly in line with estimates. Gross NPA declined to 3.19 per cent, better than the Zee Business estimate of 3.2 per cent and lower than 3.5 per cent in the previous quarter. Net NPA eased to 0.32 per cent, broadly matching the 0.3 per cent estimate.

The slippage ratio eased to 0.67 per cent, broadly validating Zee Business’s expectation of a sustained improvement in asset quality and further reduction in NPAs.

Business growth on track

Zee Business had pencilled in steady business growth for the quarter, with loan growth of around 10.3 per cent and deposit expansion near 9.6 per cent. PNB’s performance remained largely in line with these estimates, driven by healthy momentum across the retail, MSME and corporate segments.

Market reaction

Despite the earnings beat, PNB shares declined over 5 per cent in intraday trade, as investor sentiment was weighed down by the pressure on NII and margins, even as the bank’s medium-term outlook continues to appear constructive.