Punjab National Bank Retains Loan, Deposit Growth Outlook For FY26

Punjab National Bank has retained its loan and deposit growth outlook, but expects net interest margins to remain under pressure due to repo rate cuts by the Reserve Bank of India in the current financial year, Executive Director Kalyan Kumar told NDTV Profit.

Kumar expects loan and deposit growth at 11-12% and 9-10%, respectively in the current financial year, unchanged from last year. For the quarter ended March, PNB's loan book grew 13.6% on year to Rs 11.16 lakh crore and deposits grew 14.4% on year to Rs 15.66 lakh crore.

On profitability, Kumar said that 44% of its loan book is linked to repo rate loans and that the bank took a hit of Rs 250 crore on its income during the March quarter because of the rate cut.

"We expect more rate cuts in the near future and that will certainly impact our margins, but I am of the opinion NIM will hover around 2.8-2.9% for the year," Kumar told NDTV Profit in an interview. For the quarter ended March, global NIM was at 2.81%.

This has come as the bank has already started recalibrating its loan book by focusing on rural, agricultural and micro and small and medium enterprises.

RAM advances grew by nearly 16% on year to Rs 6.02 lakh crore.

Further, it also opened 1,000 MSME and agriculture branches in active clusters and has prepared special customised products, which will help it with margins.

Overall, Kumar expects to maintain return on assets at 1% in FY26.

On the Supreme Court's judgement to liquidate Bhushan Power and Steel Ltd., Kumar said that the bank had an exposure of Rs 6,286.22 crore and received approximately Rs 3,000 crore.

The committee of creditors will take the decision as they have started the meetings, he said. "The recourse and the facilities available in the law are contemplating for further action what they have to take within the permitted timeframe as per the law of the land," he said. CoC is discussing the judgement and as things will evolve the bank will come to know more about it, he added.