During Monday’s morning trading session, shares of India’s first Swadeshi Bank and one of the leading commercial banks in India were trading flat at Rs. 102.9 on BSE, with a market cap of Rs. 1.18 lakh crores.
Punjab National Bank’s management targets 11-12 percent loan growth in FY26, supported by MSME, agriculture, and retail lending. In this article, we’ll take a closer look at the management’s outlook and highlight other important growth aspects of the bank. The stock has delivered negative returns of over 17 percent in one year, but has gained by nearly 2.5 percent in the last one month.
Management Guidance
For FY26, Punjab National Bank (PNB) has outlined its growth projections across 13 key performance indicators. The bank is aiming for a credit growth of 11-12 percent, driven largely by increased lending to the MSME, agriculture, and retail sectors. Deposit growth is expected to be in the range of 9-10 percent, while operating profit is projected to rise by 8-9 percent year-on-year.
PNB anticipates its Net Interest Income (NII) to grow by 7 percent, with a Net Interest Margin (NIM) maintained between 2.8-2.9 percent. On the asset quality front, the bank is targeting gross non-performing assets (NPA) to stay below 3 percent, and net NPA at around 0.35 percent. The Provision Coverage Ratio (PCR) is expected to remain strong at above 96 percent, and credit cost is likely to stay under 0.5 percent. Additionally, PNB is aiming for a return on assets (ROA) of over 1 percent and a slippage ratio of less than 1 percent.
According to PNB’s Managing Director Atul Kumar Goel (Chandra), credit growth has already begun to show traction in Q1 FY26, with corporate loan disbursements—based on previously sanctioned limits—expected to accelerate in the second and third quarters. Currently, nearly 44 percent of the bank’s loan portfolio is linked to the External Benchmark Lending Rate (EBLR), while around 50 percent is tied to the Marginal Cost of Funds-Based Lending Rate (MCLR).
PNB is counting on loan growth, improved recoveries, and gains from treasury operations to drive its profitability in FY26. The bank is on track to achieve the recovery target of Rs. 16,000 crore this year, affirmed CEO Atul Kumar Goel (Chandra), expressing strong confidence in the bank’s trajectory. In fact, he believes PNB is poised to surpass its credit growth guidance for FY26.
Looking ahead, PNB is placing a sharp focus on expanding digital lending in the MSME space, along with loans to self-help groups (SHGs) and for farm mechanisation. Chandra anticipates robust growth in these areas, expecting an increase of 40-50 percent in the coming months.
The bank’s broader strategy is rooted in enhancing customer experience and operational efficiency. Key focus areas include improving branch and ATM ambience, strengthening its footprint in 100 priority districts (which account for 66 percent of its CASA base), and refining products and internal processes.
PNB is also working to expand in the Retail, Agriculture, and MSME (RAM) sectors, boost non-interest income, and optimise costs. In addition, the bank is investing in technology, data analytics, and cybersecurity, while aligning with environmental, social, and governance (ESG) standards. A renewed emphasis on loan recovery, slippage prevention, and transparent HR practices.
Financials
PNB reported a marginal growth in its net interest income (NII), showing a year-on-year rise of around 4 percent from Rs. 10,476 crores in Q4 FY24 to Rs. 10,883 crores in Q4 FY25. Similarly, its net profit increased during the same period from Rs. 3,100.8 crores to Rs. 4,642.8 crores, representing a significant growth of around 50 percent YoY.
Punjab National Bank (PNB) is a state-owned commercial bank engaged in offering banking products, and also operates credit card and debit card business, bullion business, life and non-life insurance business, and gold coins and asset management business.
Written by Shivani Singh
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