Strong credit growth and steady deposit mobilisation help PNB post healthy expansion in domestic and overseas operations during October–December quarter.
Mumbai, January (Economy India): State-owned Punjab National Bank (PNB) on Friday reported a solid performance in the third quarter of the current financial year, with its global business increasing by 9.57% year-on-year to ₹28.92 lakh crore as of December 31, 2025. The growth reflects sustained momentum in lending activities, stable deposit accretion, and improving balance sheet strength.
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The country’s second-largest public sector lender shared its provisional business figures for the October–December quarter with stock exchanges, indicating continued recovery and operational resilience amid a challenging global and domestic macroeconomic environment.
Domestic Business Grows Over 9%
According to the exchange filing, PNB’s domestic business stood at ₹27.65 lakh crore, registering a 9.09% growth compared to the corresponding quarter of the previous financial year (Q3 FY25).
Domestic operations continue to remain the backbone of PNB’s overall business, accounting for a significant share of both advances and deposits. Bank officials attributed the growth to increased credit demand from key sectors such as retail, MSMEs, agriculture, and select industrial segments.
“Domestic credit demand has remained resilient, especially from retail and MSME segments, which are key drivers of growth for public sector banks,” a senior banking analyst said.
Punjab National Bank’s Global Business Rises 9.57% to ₹28.92 Lakh Crore in Q3 FY26
Global Operations Maintain Momentum
PNB’s global business growth of 9.57% underscores steady performance in overseas branches and international operations, despite global economic uncertainties, volatile currency markets, and geopolitical tensions.
The bank has been focusing on strengthening trade finance, NRI banking, and overseas credit operations while maintaining strict risk management norms.
“Global business growth indicates that Indian banks are regaining confidence in international markets, supported by trade flows and diaspora banking,” said a former banker familiar with PSU bank operations.
Credit Growth Trends
While the bank did not disclose detailed breakup figures for advances and deposits in the provisional update, analysts believe credit growth remained in high single digits, in line with broader banking sector trends.
Key drivers of PNB’s loan growth include:
Retail lending (housing, personal loans)
MSME financing
Agriculture credit
Select infrastructure and corporate loans
The bank has been cautious in large-ticket corporate lending, focusing instead on granular, diversified credit growth to manage asset quality risks.
Deposit Mobilisation Remains Stable
Deposit growth has been a critical focus area for banks amid intense competition for low-cost funds. PNB has continued to strengthen its CASA (Current Account Savings Account) base while offering competitive term deposit rates.
Market experts note that maintaining deposit growth without significantly raising cost of funds will be crucial for sustaining profitability in the coming quarters.
“Deposit mobilisation is the real challenge in the current cycle, and PNB’s steady domestic business growth suggests it is holding its ground well,” said a treasury expert.
Punjab National Bank’s Global Business Rises 9.57% to ₹28.92 Lakh Crore in Q3 FY26
Asset Quality and Balance Sheet Strength
PNB has made significant progress in recent years in improving asset quality through:
Aggressive recovery efforts
Resolution of stressed assets
Lower slippages
Higher provisioning coverage
Though the provisional filing does not include asset quality metrics, analysts expect gross and net NPAs to remain on a declining trajectory, supported by better recoveries and prudent underwriting standards.
The bank’s strengthened balance sheet has also enabled it to support credit expansion while maintaining regulatory capital adequacy norms.
Public Sector Banks Show Sector-Wide Recovery
PNB’s Q3 performance aligns with the broader trend of recovery among public sector banks (PSBs), which have collectively reported:
Improved profitability
Lower NPAs
Strong credit growth
Better capital efficiency
Government-led banking reforms, recapitalisation support in earlier years, and improved governance have played a key role in restoring confidence in PSBs.
“Public sector banks are no longer just about stability; they are now competing effectively with private lenders on growth and efficiency,” an industry observer noted.
Stock Market and Investor Sentiment
PNB’s business update is likely to be viewed positively by investors, as business growth often serves as a leading indicator for revenue and profit performance.
Market participants, however, will closely watch:
Net interest margin (NIM) trends
Asset quality numbers
Operating expenses
Profit growth
These details are expected to be disclosed when the bank announces its full Q3 FY26 financial results later this quarter.
Challenges Ahead
Despite the positive momentum, PNB and other lenders face several challenges:
Rising cost of deposits
Global economic uncertainty
Interest rate volatility
Competition from private and fintech players
Additionally, currency fluctuations and geopolitical risks could impact overseas operations, requiring cautious expansion strategies.
Outlook for FY26
Looking ahead, analysts expect PNB to:
Maintain steady credit growth
Focus on retail and MSME lending
Strengthen digital banking initiatives
Further improve asset quality and operational efficiency
The upcoming Union Budget 2026–27 and the Reserve Bank of India’s policy stance will also play a crucial role in shaping the banking sector’s growth outlook.
“If macro conditions remain stable, PSU banks like PNB are well-positioned to sustain growth while improving profitability,” said a banking sector strategist.
Punjab National Bank’s 9.57% rise in global business during the third quarter highlights the lender’s steady growth trajectory and strengthening fundamentals. With domestic operations showing robust expansion and overseas business holding firm, PNB continues to consolidate its position as a key pillar of India’s public sector banking system.
As the bank prepares to announce detailed quarterly results, investors and analysts will closely monitor profitability metrics and asset quality indicators to assess the sustainability of this growth momentum.
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