PNB Sees ₹700 Crore Quarterly Savings Under New Tax Regime

New Delhi

Punjab National Bank (PNB) expects to save ₹700 crore per quarter, or ₹2,800 crore annually, after shifting to the new corporate tax regime, said Executive Director D Surendran. The state-run lender took a one-time provisioning hit of ₹3,300 crore in Q1 FY26 due to deferred tax asset adjustments, significantly reducing net profit. However, Surendran called the move a “prudent long-term decision” that will boost future profitability, as the tax rate falls from 35% to 25%.

Despite the accounting impact, PNB reported strong operational metrics. Profit before tax rose 28.3% to ₹6,758 crore, and operating profit crossed ₹7,000 crore, a record for the bank. Net interest income grew just 1% year-on-year and declined 1.7% sequentially, due to a lag in deposit repricing amid falling rates. A recovery in NII is expected by Q3 or Q4.

The bank saw an 11.6% rise in global business, with deposits up 12.9% and advances 9.8%. MSME loans grew 18%, while corporate loans grew 7% despite trimming ₹21,000 crore in low-yield assets. Credit-deposit ratio is expected to touch 73% by FY26-end.

Asset quality remains solid. Net NPA is at 0.38%, and provision coverage exceeds 90%. Recoveries totaled ₹3,350 crore, nearly double the slippages of ₹1,880 crore. PNB targets ₹16,000 crore in recoveries this fiscal.

The bank’s CASA ratio slipped to 37%. In response, it waived minimum balance charges and launched new savings products, opening 12 lakh accounts in Q1. PNB has transferred ₹5,136 crore worth of stressed assets to NARCL.