PNB Q1 Results: Net profit zooms 159% to highest-ever at ₹3,251 crore, NII up 10% YoY; Asset quality improves

PNB Q1 Results: Punjab National Bank (PNB) announced its April-June quarter results for fiscal 2024-25 (Q1FY25) on Saturday, July 27, reporting a rise of 159 per cent in standalone net profit at ₹3,251.5 crore – its highest-ever quarterly profit, compared to ₹1,255.4 crore in the corresponding period last year. The 

The public sector lender's net interest income (NII) - the difference between interest earned and paid - rose 10.2 per cent to ₹10,476.2 crore in the first quarter of current fiscal, compared to ₹9,504.3 crore in the year-ago period.

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PNB Q1 Results - Key Metrics

The substantial increase in net profit is attributed to robust performance across various financial metrics, driven mainly by a decline in bad loans and an improvement in interest income. The PSB's total income in the June quarter rose to ₹32,166 crore from ₹28,579 crore in the same period a year ago.

The bank's interest income increased to ₹28,556 crore from ₹25,145 crore in the same quarter a year ago. The return on assets (RoA) improved markedly to 0.82 per cent in the June quarter from 0.34 per cent, while the return on equity (RoE) rose to 16.82 per cent from 7.50 per cent in the year-ago period.

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PNB's asset quality showed considerable improvement. The bank's gross non-performing assets (NPA) ratio decreased by 275 basis points to 4.98 per cent as of June 2024, down from 7.73 per cent in June 2023. Similarly, the net NPA ratio improved by 138 basis points to 0.60 per cent from 1.98 per cent a year ago.

PNB revised its FY25 guidance for the GNPA ratio to approximately four per cent from five per cent and credit cost to below 0.5 per cent from below one per cent earlier. Provisions for bad loans fell drastically to ₹792 crore in the June quarter, compared to ₹4,374 crore in the year-ago period. 

The bank's capital adequacy ratio improved to 15.79 per cent at the end of June 2024, compared to 15.54 per cent in the year-ago period. The provision coverage ratio, including technical write-offs (TWO), increased by 607 basis points (bps) to 95.90 per cent, and the ratio excluding TWO improved by 1259 bps to 88.43 per cent. 

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The slippage ratio improved by 43 bps to 0.76 per cent, and the credit cost decreased by 167 bps to 0.32 per cent from 1.99 per cent. PNB reported a 10.27 per cent year-on-year (YoY) increase in operating profit, which stood at ₹6,581 crore for Q1FY25, compared to ₹5,968 crore in Q1FY24. The bank's global business grew by 10.03 per cent YoY to ₹24,36,929 crore from ₹22,14,741 crore.

Global deposits increased 8.50 per cent to ₹14,08,247 crore, while global advances rose 12.20 per cent to ₹10,28,682 crore. The bank's credit-deposit (CD) ratio improved to 73.05 per cent in the June quarter, up from 71.79 per cent in March 2024 and 70.64 per cent a year ago.

Deposits saw healthy growth, with savings deposits increasing to ₹4,84,377 crore, reflecting a 4.4 per cent YoY growth. CASA deposits grew by 3.4 per cent to ₹5,49,079 crore, maintaining a CASA share of 40.08 per cent. Retail term deposits (less than ₹3 crore) grew by 9.2 per cent YoY to ₹5,85,598 crore.

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Advances also showed robust growth. The total retail credit increased by 14.4 per cent YoY to ₹2,34,564 crore. The core retail advances grew by 15.5 per cent, with housing loans up by 14.7 per cent to ₹1,01,796 crore and vehicle loans rising by 26.9 per cent to ₹21,726 crore. 

Agriculture advances grew by 15.8 per cent to ₹1,68,503 crore, and MSME advances increased by 7.9 per cent to ₹1,42,886 crore. As of June 30, 2024, PNB operated 10,150 domestic and two international branches. The bank's network includes 12,080 ATMs and 32,630 business correspondents. On Friday, shares of PNB settled 1.87 per cent higher at ₹119.90 apiece on the BSE.