PNB Q1 profit surges over three-fold to Rs 5,253 cr, aims USD 2.5 bn from FCNR deposits

New Delhi, Jul 18 (PTI) Punjab National Bank (PNB) on Saturday reported an over three-fold jump in standalone net profit at Rs 5,253 crore for the quarter ended June 30, 2026, primarily helped by a reduction in tax payment. The state-owned bank had posted a net profit of Rs 1,675 crore in the year-ago period. As the bank migrated to the new tax regime, the tax liability decreased by Rs 3,358 crore, which directly added to the bottomline, PNB MD and CEO Ashok Chandra said during the media interaction after the announcement of quarterly numbers. As a result, the bank posted its highest-ever first quarter profit of more than Rs 5,000 crore, he said. Total income in the quarter under review remained static at Rs 37,231 crore, PNB said in a regulatory filing. However, the lender's interest income increased marginally to Rs 32,897 crore, from Rs 31,964 crore in the same quarter a year ago. Net interest income too improved marginally by 2 per cent to Rs 10,798 crore as against Rs 10,578 crore in the same period of the previous financial year. During the period, the bank's operating profit rose to Rs 7,519 crore, as compared to Rs 7,081 crore in the same quarter a year ago, registering a 6 per cent growth. Asked about the foreign currency deposit mobilisation drive started last month, Chandra said the bank has collected USD 425 million till July 17. "We aim to mobilise up to USD 2.5 billion in FCNR (B) deposits till September 30," he said. PNB currently offers interest rates varying from 4.9-6.5 per cent on FCNR (B) deposits depending on tenure and amount. In a bid to attract foreign currency deposits by Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs) and Persons of Indian Origin (PIOs), the Reserve Bank of India last month withdrew, till September 30, the interest rate ceiling on fresh Foreign Currency Non-Resident (Bank) deposits of 3-5 years' maturity. The move came at a time when FCNR (B) deposit inflows weakened sharply, with net inflows dropping to just USD 946 million in FY26 from USD 7.1 billion in FY25. In 2023, the RBI had introduced similar schemes when dollar outflows were high, triggered by the taper tantrum. As regards asset quality, the bank exhibited improvement as gross non-performing assets (NPAs) declined to 2.78 per cent of gross advances at the end of the June quarter, from 3.78 per cent a year ago. Gross Non-Performing Assets (GNPA) in absolute terms declined by Rs 7,292 crore to Rs 35,381 crore from Rs 42,673 crore, while Net Non-Performing Assets (NNPA) eased by Rs 699 crore to Rs 3,433 crore from Rs 4,132 crore as on June 2025. Similarly, net NPAs, or bad loans, declined to 0.26 per cent, as against 0.38 per cent in the year-ago period. However, provisions for bad loans rose to Rs 792 crore during the first quarter, as compared to Rs 396 crore in the same period a year ago. Explaining the reason for the increase in provision, Chandra said the bank has made an additional floating provision of Rs 390 crore during the quarter for Expected Credit Loss (ECL) that would kick in from April 1, 2027. During the quarter, the slippage ratio improved by 3 bps to 0.68 per cent from 0.71 per cent as on Q1 FY'26. The bank's capital adequacy ratio improved to 18.13 per cent from 17.5 per cent at the end of the first quarter of the previous financial year. Global business grew by 10 per cent to Rs 29.98 lakh crore from Rs 27.19 lakh crore as on June 25, 2026. PTI DP DRR DRR