Punjab National Bank (PNB) shares decline for second straight session; here is why

Shares of Punjab National Bank (PNB), the country's leading state-run lender, fell for a second straight session on Tuesday, January 20, a day after it reported its December quarter earnings. PNB shares fell as much as 1.97% to hit an intraday low of ₹125.53 on the National Stock Exchange (NSE). On the BSE, PNB shares dropped as much as 1.99% to hit an intraday low of ₹125.50 after its provisions for bad loans jumped sharply in October-December period.

PNB's provisions for bad loans in December quarter rose over four times to ₹1,341 crore in December quarter from ₹318 crore in the year-ago period, raising concerns among market participants.

Global investment bank Morgan Stanley in a note said that PNB's core Pre-Provision Operating Profit (PPOP) missed its estimates by 10% due to weaker net interest income (NII) and higher operational expenditure.

NII rose 1% quarter on quarter (QoQ), but net interest margin (NIM) declined 8 basis points (bps) QoQ to 2.52%, led by lower loan yields (−21 bps), partly offset by lower funding costs (−8 bps), Morgan Stanley said.

Citi in a note said that PNB has trimmed its FY26 NIM guidance to 2.6% aligning with 2.6% 9MFY26 NIMs.

CLSA said that while asset quality was good in third quarter, management mentioned that total provision requirement for Expected Credit Loss (ECL) transition would be ₹10,000 crore.

PNB Q3 earnings

PNB reported net profit of ₹5,100 crore in the third quarter of current financial year (Q3FY26), marking an increase of 13% from ₹4,508 crore in the same period last year.

The bank's net interest income or the difference between interest earned on loans and expended on deposits rose 5% to ₹11,032 crore compared with ₹10,533 crore in the year-ago period.

The Delhi-based lender's asset quality showed an improvement during the quarter as its gross non-performing assets (NPAs), as a percentage of total advances, eased to 3.19% from 4.09% in the corresponding period last year. On a sequential basis the gross NPAs came down from 3.45%.

Its net NPAs eased to 0.32% as against 0.41% in the year-ago period.

In absolute terms, gross NPAs stood at ₹39,314 crore compared with ₹45,414 crore in the corresponding period of the last financial year.

During the quarter, bank's global business rose 9.5% year-on-year to ₹28.91 crore compared with ₹26.39 lakh crore.

PNB's core retail advances increased by 18.9% Y-o-Y with housing loan portfolio rising by 14.5% Y-o-Y to ₹1,27,364 crore and vehicle loan posted a growth of 35.7% Y-o-Y to reach ₹33,458 crore.

Agriculture Advances grew by 9.8% on Y-o-Y basis to ₹1,91,629 crore and MSME advances increased Y-o-Y by 18.1% to ₹1,88,209 crore, the Delhi-based lender said.

As on December 31, 2025, the bank had 10,261 domestic branches and two international branches. Out of total number of branches, bank had 63.3% branches in rural & semi-urban areas.

As of 12:03 pm, PNB shares traded 1.91% lower at ₹125.72, underperforming the NIFTY Bank index which was down 0.24%.