Punjab National Bank (PNB) Share Price Jumps Over 5%; Targets 7-9 bps NIM Expansion in Q3FY27

Punjab National Bank (PNB) expects its net interest margin (NIM) to expand by another 7-9 basis points in Q3FY27 following the repo rate hike, as per news report.  

The bank expects loan repricing and lower funding costs to support margins. It also aims to maintain loan yields at 8-9% while keeping deposit costs under control. 

PNB's repo-linked loans are reset on a T+1 basis. The bank expects this to increase loan yields by more than 10 basis points. With liquidity remaining ample, management does not expect to raise deposit rates.  

These expectations were outlined during the bank's Q2FY27 conference call, as reported by Elara Capital. 

Loan Mix and Deposit Costs 

PNB has reduced low-yielding advances by around ₹55,000 crore as part of its efforts to improve loan yields. It aims to increase the share of retail, agriculture and micro, small and medium enterprise (MSME) loans to 58-59% by the end of FY27. 

The bank's advances grew 14.7% year-on-year despite a ₹23,700 crore reduction in its exposure to inter-bank participation certificates. Its credit pipeline stood at ₹1.58 lakh crore. 

PNB raised $2.7 billion through FCNR(B) deposits and used the funds to repay bulk deposits and certificates of deposit. Their combined share of total deposits fell to 17% in Q2FY27 from 19% in Q1FY27. 

Individual savings deposits grew 8.5% year-on-year, while institutional savings deposits declined 3.84%. Overall savings account growth stood at around 7%. 

Asset Quality Improves 

PNB reported an improvement in asset quality during Q2FY27. Gross non-performing assets (NPAs) declined to 2.55% from 2.78% in the previous quarter, while net NPAs fell to 0.25% from 0.28%. 

The special mention account pool stood at 2.5%, its lowest level on record. However, the bank's sticky MSME loan pool remains a monitorable. 

Recoveries and Expected Credit Loss Impact 

PNB expects to recover ₹3,000-3,500 crore from written-off accounts in Q3FY27. It has also lowered its estimated expected credit loss (ECL) transition impact to ₹8,000 crore from the earlier estimate of ₹9,000-10,000 crore. 

The ongoing ECL impact is expected to be 15-20 basis points, with credit costs estimated at 0.2-0.3%. 

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Punjab National Bank (PNB) Share Price Performance  

As of October 19, 2026, 12:12 pm, Punjab National Bank (PNB) share price was trading at ₹122.31, up 5.17% from the previous closing price. 

Conclusion 

PNB expects higher loan yields and lower funding costs to support NIM expansion in Q3FY27. The bank is also targeting a higher share of retail, agriculture, and MSME loans while managing deposit costs and asset quality. 

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