PNB Q2 PAT may dip 22.5% at Rs 825.9cr: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal has come out with its second quarter (July-September) earnings estimates for the banking sector. The brokerage house expects Punjab National Bank (PNB) to report a 35.2 percent degrowth quarter-on-quarter (down 22.5 percent Y-o-Y) in net profit at Rs 825.9 crore.

Net interest income of Punjab National Bank is expected to increase by 0.8 percent Q-o-Q (up 7.9 percent Y-o-Y) to Rs 3,937.8 crore, according to Motilal Oswal.

Motilal Oswal's Report on Punjab National Bank:

Business growth is expected to be low amid management's focus on consolidation, with loan and deposit growth of 8 percent Y-o-Y and 2 percent Y-o-Y.

NIM is expected to be stable Q-o-Q at 3.5 percent, led by an improvement in liability profile over the past few quarters.

At end-1QFY14, the bank had 35 percent of portfolio in AFS, with a duration of 4.7 years. And due to an increase in G-sec yields, we model a net investment loss of INR 1.2 billion v/s investment gain of INR 1.9 billion in 1QFY14.

Net slippage ratio is likely to decline from the levels of 1QFY14, which is seasonally a weak quarter. Also, there was a large corporate account of INR 16.6 billion (i.e. 45 percent+ of overall slippages) that slipped into NPA. We factor a net slippage ratio of 1 percent v/s 3.3 percent in 1QFY14. Further, restructuring would keep the stress high.

Overall, we lower the earnings estimate by 10/13 percent for FY14E/15E, to factor lower NIMs, MTM loss and increase in credit cost.

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