Punjab & Sind Bank Q3 Results: Profit Soars 19%, NPAs Decline Sharply

Introduction to Q3 Performance

Punjab & Sind Bank announced a strong operational performance for the third quarter of fiscal year 2026, reporting a 19.3% year-on-year increase in net profit. The state-owned lender's profit after tax stood at ₹336.4 crore for the quarter ended December 31, 2025, compared to ₹282 crore in the same period of the previous year. This growth was primarily driven by a significant improvement in asset quality and steady expansion in core business operations.

Detailed Financial Highlights

The bank's financial results reflect healthy growth in its primary income streams. Net Interest Income (NII), the difference between interest earned and interest expended, grew by 5% year-on-year to ₹986.2 crore. Total income for the quarter also saw an increase, reaching ₹3,529 crore, up from ₹3,269 crore in the corresponding quarter of the previous fiscal year. Interest income rose to ₹3,042 crore from ₹2,931 crore a year ago, indicating better returns on its lending activities.

Significant Improvement in Asset Quality

A key highlight of the quarter was the marked improvement in the bank's asset quality. Gross Non-Performing Assets (GNPA) as a percentage of gross advances declined to 2.60% at the end of December 2025. This is a substantial improvement from 2.92% in the previous quarter (Q2 FY26) and 3.83% a year earlier (Q3 FY25). In absolute terms, gross NPAs fell to ₹2,870.8 crore from ₹3,082 crore in the preceding quarter.

Similarly, Net Non-Performing Assets (NNPA) eased to 0.74% from 0.83% sequentially and showed a significant drop from 1.25% year-on-year. The value of net NPAs decreased to ₹795.9 crore from ₹854.1 crore in the second quarter. This consistent reduction in bad loans points to effective recovery mechanisms and prudent lending practices. Consequently, provisions for bad loans declined to ₹47 crore for the quarter, compared to ₹96 crore in the same period last year.

Robust Business Expansion

Punjab & Sind Bank demonstrated solid growth across its business segments. The bank's total business expanded to ₹2,49,691 crore as of December 31, 2025, marking an 11.84% increase year-on-year and a 3.49% rise quarter-on-quarter. This growth was balanced between deposits and advances.

Total deposits reached ₹1,39,203 crore, growing 9.27% year-on-year. CASA (Current Account and Savings Account) deposits, a source of low-cost funds, increased by 8.77% YoY to ₹43,182 crore, with the CASA ratio standing at 31.02%.

Strong Credit Growth

The lending side of the business showed even stronger momentum. Gross advances grew by an impressive 15.25% year-on-year to ₹1,10,488 crore. This outpaced deposit growth, leading to an improved credit-deposit (CD) ratio of 79.37%, up from 77.79% in the previous quarter and 75.25% a year ago. A higher CD ratio suggests efficient utilization of deposits for lending, which is a primary driver of profitability for banks.

Key Financial Ratios and Capital Position

The bank's overall financial health is further supported by its strong capital and coverage ratios. The Provision Coverage Ratio (PCR) improved to 92.23% as of December 2025, up from 89.53% a year earlier, indicating a stronger buffer against potential loan losses. The Capital Adequacy Ratio (CAR) also strengthened, rising to 16.83% from 15.95% in December 2024, well above the regulatory requirement. This provides the bank with a solid capital base to support future growth.

Market Reaction and Outlook

Ahead of the results announcement, the market sentiment appeared positive. Shares of Punjab & Sind Bank closed at ₹28.91 on the National Stock Exchange, marking a 2.05% gain for the day. The strong quarterly numbers, particularly the sustained improvement in asset quality and double-digit credit growth, reinforce the bank's positive operational trajectory.

Conclusion

Punjab & Sind Bank's Q3 FY26 results underscore a period of strengthening fundamentals. The 19.3% rise in net profit, coupled with a significant reduction in non-performing assets and robust expansion in both deposits and advances, paints a picture of a bank on a solid growth path. The improved capital adequacy and provision coverage ratios further enhance its resilience. These results position the bank well to capitalize on credit demand and continue its focus on maintaining a healthy balance sheet in the upcoming quarters.