Punjab National Bank (PNB) plans to sell 100 non-performing assets (NPAs) worth ₹4,000–₹5,000 crore to asset reconstruction companies in FY26, targeting a recovery rate of 40–50%. The bank also aims to touch ₹30 lakh crore in total business by year-end through strategic credit and deposit growth.
Punjab National Bank (PNB), India’s second-largest public sector bank, has announced an ambitious roadmap for FY26, combining aggressive non-performing asset (NPA) resolution with strong credit and deposit growth. The bank aims to achieve a total business size of ₹30 lakh crore by March 2026 while simultaneously improving asset quality and profitability.
NPA Sale Strategy and Recovery Targets
In a strategic move to strengthen its balance sheet, PNB has identified 100 NPA accounts with a combined book size of ₹4,000–₹5,000 crore for sale to asset reconstruction companies (ARCs). The bank anticipates an average recovery rate of 40–50%, with some high-value accounts potentially realising full recovery, backed by strong security coverage.
The NPA sale initiative is part of PNB’s broader stressed asset management framework, which includes:
- Accelerating legal and recovery proceedings under SARFAESI and IBC frameworks.
- Exploring one-time settlement schemes for smaller accounts to improve collection efficiency.
- Utilising data analytics to prioritise recoveries based on asset value and repayment potential.
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This proactive approach is expected to bring down the bank’s gross NPA ratio, which currently stands in single digits, to a more competitive level by the end of FY26.
Business Expansion Goals
PNB is working towards a total business target of ₹30 lakh crore, surpassing its earlier goal of ₹29.56 lakh crore. As of June 2025 (Q1FY26), the bank’s total business stood at ₹27.19 lakh crore, reflecting steady growth momentum.
Key growth drivers include:
- Credit Growth: A planned 11–12% loan book expansion, focusing on retail, MSME, agriculture, and select corporate sectors.
- Deposit Growth: A projected 9–10% rise in deposits, with an emphasis on low-cost CASA (current and savings account) deposits to maintain healthy margins.
- Corporate Loan Pipeline: A strong disbursement pipeline worth ₹1.29 lakh crore, with faster approval timelines—corporate loan proposals now processed within 15 days.
Sector-Wise Lending Focus
PNB’s lending strategy is designed to ensure balanced sectoral exposure while tapping into high-growth opportunities:
- Retail Banking: Targeting a 17% growth in housing, vehicle, and education loans, backed by digital lending platforms for faster processing.
- MSME Financing: Building on a robust 17–18% growth in MSME loans in FY25, with continued outreach through credit camps and tie-ups with industry bodies.
- Agricultural Lending: Planning a 30–40% increase in self-help group (SHG) financing, alongside investment in rural infrastructure projects such as cold storage, warehouses, and food processing units.
- Corporate Lending: Prioritising projects in infrastructure, renewable energy, and manufacturing, with strict credit assessment to maintain asset quality.
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Profitability and Operational Efficiency
In Q1FY26, PNB posted its highest-ever quarterly operating profit of ₹7,081 crore, reflecting disciplined cost management and improved income streams. This performance was driven by:
- A better net interest margin (NIM) supported by healthy CASA growth.
- Rationalisation of high-cost bulk deposits.
- Growth in fee-based income from treasury operations, trade finance, and bancassurance.
The bank has also invested in technology-driven monitoring systems to flag early signs of stress in loan accounts, enabling quicker intervention.
Digital and Customer-Centric Initiatives
PNB is accelerating its digital transformation to attract younger customers and improve operational efficiency:
- Launching AI-powered credit scoring models for faster loan approval.
- Expanding mobile banking capabilities with enhanced security features.
- Integrating with UPI 2.0 and payment gateways to facilitate seamless transactions.
Additionally, customer service upgrades include faster turnaround times for service requests, wider branch network coverage, and multilingual support in digital channels to cater to rural and semi-urban customers.
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PNB – Financial Snapshot
| Metric | Q1FY26 | FY25 (Full Year) | Growth / Change |
| Total Business | ₹27.19 lakh cr | ₹26.10 lakh cr | +4.17% |
| Credit Growth | 11.4% YoY | 10.6% YoY | ↑ |
| Deposit Growth | 9.3% YoY | 8.8% YoY | ↑ |
| Gross NPA Ratio | 5.8% | 6.2% | ↓ |
| Net NPA Ratio | 1.6% | 1.8% | ↓ |
| Operating Profit | ₹7,081 cr | ₹25,412 cr | Highest Q1 Ever |
| CASA Ratio | 43.2% | 42.5% | ↑ |
| Corporate Loan Approvals | ₹1.29 lakh cr | ₹4.8 lakh cr | Strong pipeline |
Outlook for FY26
With a multi-pronged strategy—focusing on aggressive NPA recovery, sector-specific lending growth, operational efficiency, and digital adoption—PNB is positioning itself for a stronger market presence in FY26. The bank’s dual focus on asset quality and business expansion is expected to not only strengthen its balance sheet but also boost shareholder value.
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