PNB Q4 results highlights: profit increased by 52% year-on-year to ₹4,567 crore

In Q4, Punjab National Bank (PNB) produced a robust set of numbers, exhibiting a marked turnaround in its financials. The government-owned lender posted a net profit of ₹4,567 crore, which is a robust 52% year-on-year increase, driven by an increase in interest income, and improved asset quality. 

The profit posted by the lender also shows consistency in the efforts to strengthen the lender’s core business, tackle bad loans, and boost credit growth. During the quarter, net interest income (NII) also progressed, with retail and corporate loan segments contributing to revenue growth. With a lower provision for bad loans and slippages under control, the profit improvement shows a positive trend for the lender’s operations in the future.

The step, sure to please shareholders, follows PNB’s declaration of a final dividend of  ₹2.90 a share, signalling the faith of management in its current and future financial strength. The dividend is a considerable jump over last year, and a reward to stockholders who’ve held in as the bank marched through the turnaround and recovery process.

Moving forward, the bank has outlined plans to raise up to ₹8,000 crore of capital through a mix of equity and debt instruments. Capital will further entrench the bank’s balance sheet, support future lending growth, and keep well ahead of the regulatory capital.

The board has already approved the fundraising proposal and is expected to be able to start the process in the next couple of months. Analysts view this move to be especially prudent as it enables PNB to take fuller advantage of credit demand in an improving economy. 

Overall, the greater profitability, capital planning, and increase in credit is a much better position for PNB after what appears to be many years of difficulty. In-market and it appears to have also stirred greater confidence on PNB’s long-term growth plan with its Q4 performance expounding additional optimism.