State-owned Punjab National Bank (PNB) has announced a robust financial performance for the first quarter of the current fiscal year, reporting a net profit of ₹5,253 crore. This marks a substantial 213.60% increase compared to the ₹1,675 crore recorded in the corresponding quarter of the previous year.
The sharp rise in profitability is primarily attributed to a significant reduction in income tax provisions. PNB provisioned ₹1,725 crore for income tax in Q1, a stark contrast to the ₹5,083 crore provisioned in the same quarter last year. This change reflects the bank's shift to the new tax regime and the impact of a one-time income tax provision made previously.
Key Financial Highlights and Growth Drivers
PNB's Net Interest Income (NII), the difference between interest earned and interest expended, grew by 2.1% year-on-year to ₹10,798 crore for the June quarter. The bank also saw an improvement in its Net Interest Margin (NIM), which sequentially rose to 2.50% in Q1 from 2.47% in the preceding March quarter.
Interest income on advances demonstrated healthy growth, increasing by 6.4% to ₹23,061 crore in the June quarter, up from ₹21,664 crore a year ago. While fee-based income for the quarter stood at ₹2,339 crore, showing a 19.6% sequential increase, it registered a year-on-year decline.
Asset Quality Improves Significantly
The bank made notable progress in improving its asset quality. The gross Non-Performing Asset (NPA) ratio improved by 17 basis points sequentially, reaching 2.78% in the June quarter. More impressively, it was down by a significant 100 basis points from 3.78% recorded in the year-ago quarter, indicating a stronger loan book.
With a vast network comprising 10,359 domestic branches and two international branches, PNB's operational efficiency also saw positive trends. The bank reported a net profit per employee of ₹21.71 lakhs and a profit per branch of ₹203.37 lakhs (₹2.03 crore), underscoring its improved performance metrics.