PNB Profit Rises by 52% on Improved Asset Quality and Reduced Provisions

Punjab National Bank (PNB), a prominent public sector lender, reported a substantial surge in its standalone net profit for the fourth quarter of the financial year 2024-25 (Q4 FY25). The bank announced on Wednesday, May 7, that its profit rose by 51.7% year-on-year (YoY), reaching ₹4,567 crore in the March 2025 quarter. This compares favourably to a net profit of ₹3,010.27 crore in the corresponding quarter last year.

On a sequential basis, the profit also saw a modest increase of 1.3% from the ₹4,508.21 crore posted in the December 2024 quarter (Q3 FY25). For the full financial year 2024-25, PNB's net profit more than doubled, rising 101% to ₹16,630 crore from ₹8,244.62 crore in the previous fiscal year. Following the earnings announcement, PNB shares closed at ₹1062.80, increasing by 2.30%.

Profitability Metrics Detail

The bank's Net Interest Income (NII), which represents the difference between interest earned and interest expended, saw a 3.8% YoY increase, rising to ₹10,756.98 crore in Q4 FY25 from ₹10,363.11 crore in the same period last year. However, the NII experienced a quarter-on-quarter decline of 2.55% from ₹11,032.25 crore posted in Q3 FY25. Net interest margin (NIM) stood at 2.81% for Q4 FY25 and 2.93% for the full FY25. The operating profit for Q4 FY25 was ₹6,776 crore, contributing to a total operating profit of ₹26,831 crore for FY25. These figures represent a YoY growth of 5.6% for Q4 and 7.6% for FY25, respectively. A significant factor contributing to the profit jump was a sharp reduction in provisions for bad loans, which fell to ₹588 crore in Q4 FY25 from ₹1,958 crore in the year-ago period. This improvement is also reflected in the credit cost, which improved by 60 basis points YoY to 0.21% in Q4 FY25 from 0.81% in Q4 FY24.

Improving Asset Quality

Gross Non-Performing Assets (GNPA) saw a substantial decline, falling by ₹12,261 crore YoY to ₹44,082 crore in the March 2025 quarter from ₹56,343 crore as of March 2024. Concurrently, the GNPA ratio improved significantly, dropping by 178 basis points YoY to 3.95% as of March 2025 from 5.73% in March 2024. Net NPA also saw a decline of ₹2,508 crore YoY, standing at ₹4,291 crore during the quarter. The Net NPA ratio improved by 33 basis points YoY to 0.40% as of March 2025 from 0.73% in March 2024.

Dividend Declared and Fundraising Plans

In addition to the financial results, PNB announced a dividend of ₹2.90 per equity share for FY 2024-25, representing 145% of the face value of ₹2 per share. This recommendation is subject to shareholder approval at the upcoming Annual General Meeting. The bank's board also approved plans to raise capital up to ₹8,000 crore through the issuance of Basel III compliant bonds during FY 2025-26. This includes raising up to ₹4,000 crore via Additional Tier-I Bonds and up to ₹4,000 crore via Tier-II Bonds.

Business Growth Overview

The bank's global business registered a YoY growth of 14.03%, reaching ₹26,83,260 crore as of March 2025. On the deposits front, total term deposits showed a strong growth of 21.5% YoY. CASA deposits grew by 3.8% YoY to ₹5,73,543 crore, with savings deposits increasing by 3.8% and current deposits by 4.0%. The CASA share stood at 37.95% as of March 2025. Total retail credit grew by 16.5% YoY, driven by housing loan growth of 18.3% and vehicle loan growth of 25.5%. Agriculture advances grew by 14.2% and MSME advances by 16.8% on a YoY basis. As of the end of the March quarter, PNB's distribution network included 10,189 domestic and two international branches, along with 11,822 ATMs and 33,349 Business Correspondents, totalling 55,360 touch points. 

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