Punjab National Bank (PNB), the third-largest public sector lender in India, reported impressive financial results for the fourth quarter of the fiscal year 2024-25, showcasing a remarkable 51% year-on-year increase in net profit. This surge in profitability reflects the bank's strategic growth initiatives and robust financial performance.
For the quarter ending March 31, 2025, PNB's net profit reached ₹4,567 crore, up from ₹3,010 crore in the same period last year. The bank's net interest income (NII) also saw a healthy rise of 3.8%, amounting to ₹10,757 crore compared to ₹10,363 crore in the previous year.
In a meeting held on May 7, 2025, PNB's board of directors recommended a dividend of ₹2.90 per equity share for the fiscal year 2024-25, subject to approval at the upcoming Annual General Meeting. This decision is expected to enhance shareholder value and reflects the bank's commitment to returning profits to its investors.
PNB's operational performance was further highlighted by a pre-provision operating profit (PPOP) of ₹7,280 crore, marking a 13.4% increase year-on-year. The bank's loan growth was robust, reaching ₹10,91,400 crore, which is a 16.8% increase from the previous year. Additionally, deposit growth stood at ₹15,64,200 crore, reflecting a 14.2% year-on-year increase.
One of the key highlights of PNB's performance was its improved asset quality. The gross non-performing asset (NPA) ratio declined to 6.27%, down from 7.05% in the previous year. The net NPA ratio also saw a significant decrease, dropping to 2.03% from 2.44% last year, indicating better risk management and a decline in bad loans.
Market analysts reacted positively to PNB's Q4 results, with the bank's share price gaining 2% in early trading on May 7, 2025. The stock, which is listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), was trading at ₹62.45 on the NSE and ₹62.30 on the BSE. The shares have shown a 52-week range of ₹38.50 to ₹65.10, and analysts have set a target price of ₹70 for the stock in the coming months, driven by the bank's strong financial performance.
Looking ahead, PNB's management anticipates operating profit growth between 8% and 9% for the financial year 2026, a slight decline from the previous year's growth of 10% to 12%. Credit growth is projected to be in the range of 11% to 12%, while deposit growth is expected to be between 9% and 10%.
In addition to its strong financial results, PNB is also planning to raise capital through the issuance of Basel III compliant Additional Tier-I and Tier-II bonds in one or more tranches during FY 2025-26. This move aims to strengthen the bank's capital base and support its future growth initiatives.
PNB's improved asset quality and strategic initiatives position the bank well for continued growth, and investors are keenly watching the management's decisions regarding dividend declarations and capital raising efforts. The bank's recent performance underscores its resilience in a competitive banking environment and its ability to adapt to changing market conditions.
As the earnings season continues, PNB's strong performance stands out amid mixed results from other companies. For instance, APL Apollo, a steel products manufacturer, reported a 71.97% rise in net profit to ₹293.11 crore for the same quarter, while Wonderla Holidays saw a decline in profits by 51% to ₹11 crore. The contrasting results highlight the varying fortunes of companies in the current economic landscape.
Overall, Punjab National Bank's financial results for Q4 FY25 not only reflect its operational efficiency and strategic foresight but also signal confidence among investors and stakeholders alike. As the bank gears up for the next fiscal year, it remains focused on enhancing shareholder value while navigating the challenges and opportunities within the banking sector.
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