Punjab & Sind Bank: Navigating Growth with Digital Prowess and Strategic Expansion

Punjab & Sind Bank has reported a robust performance for Q2 FY26, showcasing significant growth across key financial metrics alongside a clear strategic roadmap for future expansion and digital transformation. The bank's total business expanded by 12.19% year-on-year, reaching an impressive Rs.2,41,272 Crore. This growth was underpinned by a 9.42% increase in deposits and a substantial 15.97% rise in total advances. Net profit for the quarter surged by 22.92% year-on-year to Rs.295 Crore, while operating profit also saw a healthy increase of 10.26%. These figures reflect a period of sustained operational improvement and strategic execution.

The bank's asset quality has notably improved, with Gross Non-Performing Assets (NPA) declining to 2.92% and Net NPA improving by 63 basis points year-on-year to 0.83%. The Provision Coverage Ratio (PCR) also strengthened significantly, increasing by 332 basis points to 91.88%, indicating a proactive approach to risk management. Fresh slippages were contained at Rs.164 Crore, and recovery and upgradation efforts contributed positively, increasing by 14.37%. These improvements in asset quality are crucial for the bank's long-term stability and profitability.

Management highlighted several strategic initiatives aimed at accelerating growth and enhancing efficiency. A major focus is on expanding the bank's physical presence, with plans to open 200 new branches in the next one to two years, particularly targeting underrepresented regions like Maharashtra, Chhattisgarh, Karnataka, Orissa, Andhra, Telangana, Tamil Nadu, and North East. This expansion is expected to drive new business acquisition and improve market penetration. Concurrently, the bank is heavily investing in digital transformation, with digital lending for vehicle, housing, and MSME loans showing significant traction. Approximately 60% of vehicle loans and 35% of home loans are now sanctioned digitally, with a target to achieve 70% digital vehicle loan sanctions by the financial year end. The 'Navjyoti' project, a collaboration with a global consultant, aims to revamp branch efficiency and productivity, ensuring scientific target setting and performance assessment.

Furthermore, Punjab & Sind Bank is enhancing its digital infrastructure and customer-centric services. The upgraded call center is now fully operational, significantly improving collection efficiency and addressing customer grievances. The bank has also received board approval to open a branch in the Gift City, a move expected to provide substantial traction in the Forex business by attracting foreign and NRI clientele. Collaborations with entities like the RBI Innovation Hub for mule account identification and the PSB Alliance for supply chain finance management underscore the bank's commitment to innovation and proactive risk management. These initiatives collectively aim to streamline operations, improve customer experience, and diversify revenue streams.

Looking ahead, Punjab & Sind Bank is focused on sustaining its growth trajectory while maintaining disciplined asset quality. The management has provided clear guidance for FY26, targeting an advances growth of 15-16%, a RAM % to Total Advances of over 57%, and further improvements in asset quality with Gross NPA below 2.5% and Net NPA below 0.75%. The bank also plans to raise Rs.5,000 Crore in capital, comprising Rs.3,000 Crore in equity and Rs.2,000 Crore in bonds, over the next year to support its growth ambitions. Despite acknowledging a slight dip in Net Interest Margin and some pressure on non-interest income, the bank remains optimistic about a rebound in treasury income in the coming quarters. The strategic clarity, coupled with a strong focus on digital adoption and geographical expansion, positions Punjab & Sind Bank for continued resilience and growth in the evolving financial landscape.