Punjab & Sind Bank — Q1 FY27 earnings call

Call held 20 Jul 2026

Management summary

Punjab & Sind Bank reported a robust Q1 FY27 with strong advances growth and improved asset quality, leading to a 23.05% increase in net profit. While core NII showed healthy growth, operating profit remained flat due to treasury fluctuations. The bank is proactively provisioning for ECL and rebalancing its portfolio towards high-yielding RAM segments, despite some QoQ subdued growth and MSME slippages.

Highlights

  • Overall business grew by 15.27% to ₹2,66,420 crores, driven by 12.16% deposit growth and 19.35% advances growth.

  • Net Interest Income (NII) showed a strong 15.33% YoY increase, indicating improved core earnings.

  • Net profit rose by 23.05% to ₹331 crores, despite fluctuations in non-interest income.

  • Asset quality continued to improve, with Gross NPA at 2.21% and Net NPA at 0.65%, and Provision Coverage Ratio (PCR) strengthening to 92.33%.

  • RAM (Retail, Agri, MSME) advances now constitute 60% of the total book, with strong growth in Retail (36%), Agri (25%+), and MSME (32%).

Concerns

  • Operating profit remained flat at ₹545 crores, impacted by fluctuations in treasury gains and lower recovery from written-off accounts compared to the previous quarter.

  • QoQ business growth was subdued at 1.05% for overall business, 1.25% for credit, and 0.89% for deposits, which was lower than other banks in the sector.

  • Slippages saw an uptick during the quarter, mainly due to MSME accounts, totaling ₹207 crores (0.18% slippage ratio).

Key financials

2 periods

Headline

  • Overall Business
    ₹2.66L Cr
    YoY +15.3% QoQ +1.1%
  • Advances Growth
    —
    YoY +19.4% QoQ +1.3%
  • Deposit Growth
    —
    YoY +12.2% QoQ +0.89%
  • Net Interest Income (NII) Growth
    —
    YoY +15.3%
  • Operating Profit
    ₹545 Cr
    YoY 0%
  • Net Profit
    ₹331 Cr
    YoY +23.1%
  • Gross NPA
    2.2%
  • Net NPA
    0.65%
  • PCR
    92.3%
  • Cost to Income Ratio
    60.2%
  • Capital Adequacy Ratio (CAR)
    17.6%
  • NIM
    2.5%
  • Core Fee Income Growth
    —
    YoY +13.9%
  • CASA Growth
    —
    YoY +10.2%
  • Retail Term Deposit Growth
    —
    YoY +14.9%

Q1

  • Slippage
    ₹207 Cr
  • Slippage Ratio
    0.18%

What they filed

Q1 FY27: revenue up 10.4%, net profit up 23.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,739 2,931 3,159 2,911 2,999 +9%3,042 +4%3,030 −4%3,213 +10%
Net profit240 282 313 269 295 +23%336 +19%422 +35%332 +23%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentShare of PortfolioGrowth
RAM Advances (Share of Total Book)——
Retail Advances25.8%36%
Agri Advances13.4%25%
MSME Advances20.8%32%

Capital allocation

high confidence
  • Liquidity Liquidity disclosed Capital Adequacy Ratio (CAR) stands at a healthy 17.61%. The bank aims to mobilize around $100 million through FCNR(B) deposits, OFCB, and ECB borrowings.
    The health of the credit portfolio continues to be robust, and the capital adequacy now stands at a healthy level of 17.61%. So we estimate around $20 million to $25 million in that aspect. Of course, RBI has also given a window for OFCB and ECB borrowings. So we expect to mop up around all the three components of FCNR(B) deposits and the two borrowing routes, we expect to mobilize around $100 million in this matter, that's the estimate for us.

Guidance & targets

Advances Growth

  • Overall Credit Growth Advances Growth · FY27 · High confidence 18% to 20%

    Previously 16-18% → 18% to 20%

    So, we feel that the overall growth story of the bank in terms of credit will be between 18% to 20% going forward, notwithstanding the issue of the quarterly sequential growth. We don't feel that's a challenge, we have enough pipeline, we have undisbursed sanctions of around Rs.15,000 crores, we have done a lot of work on the digital asset side and our branch activation has improved. The contribution from the branches in terms of RAM credit has now grown significantly. So overall, of course, the focus would be on the RAM segment, as I said, we would like to bring this 60% to around 65%, and we are working on each of the three segments- Retail, Agri, MSME, particularly on the segmental part. We are getting a lot of positive results on food and agro processing, that's a champion sector for the bank internally that we have created and I think that's the area where we will be working very closely going forward as it is giving us a lot of traction. On the retail front also, we are now having digital gold loans. We have also now simplified the processes of digital loan against fixed deposits. Very shortly we are going to launch the loan against mutual funds, that too digitally. Of course the other vanilla products- housing loan, Car loan, GST loan, all are very appropriately being done. So that encourages us that we are now growing both organically through the branch network based growth and also digitally enabled growth. On Personal loan, again yes, one more area where we are now at par with the industry. We have created a digital personal loan STP journey also. Keeping all these things in mind and some of the other new initiatives also around the pipeline that we will let you know once it is in place, maybe after the second quarter. We're also doing a lot of co-lending, we have a specialized cell of co-lending which does a lot of hard work in terms of doing co-lending business. So overall, though we have kept the guidance of 16% to 18% and have achieved 19% plus, we feel that the 19%-20% growth is very much possible and is within our appetite as well.

    — Mr. Swarup Kumar Saha

Portfolio Mix

  • RAM Advances Share Portfolio Mix · by year-end · High confidence 64-65%

    Previously above 60% → 64-65%

    On the RAM percentage, we said it will be above 60% at the end of the year so we are already at 60.02%. Our endeavour would be to bring it upto 64-65% by the end of the year.

    — Mr. Swarup Kumar Saha

Profitability

  • NIM Profitability · going forward · High confidence 2.60% to 2.65%
    We expect that we should be around 2.60% to 2.65% in NIM.

    — Mr. Swarup Kumar Saha

  • ROA Profitability · current year · High confidence 0.85% to 0.90%
    In terms of ROA, we should be between 0.85% to 0.90%.

    — Mr. Swarup Kumar Saha

  • ROE Profitability · current year · Medium confidence around 12%
    It should be around 12%.

    — Mr. Swarup Kumar Saha

Efficiency

  • Cost to Income Ratio Efficiency · current year · High confidence below 60%
    Cost to income, we should be below 60%.

    — Mr. Swarup Kumar Saha

  • Cost to Income Ratio Efficiency · in another two to three years · Low confidence below 50%
    Reduction of the cost-to-income ratio below 50 is an aspiration for us, and we expect that can happen in another two to three years' time.

    — Mr. Swarup Kumar Saha

Fee Income

  • Core Fee Income Fee Income · current year · High confidence ₹900-1000 crores
    We have set up a target of Rs.900 crore to Rs.1000 crores of core fee income for the current year.

    — Mr. Swarup Kumar Saha

Asset Quality

  • Total SMA Percentage Asset Quality · going forward · High confidence less than 3%
    Our endeavour is to bring down the total SMA percentage to less than 3% going forward.

    — Mr. Swarup Kumar Saha

  • Annual Slippages Asset Quality · current year · High confidence below ₹600 crores

    Previously ₹677 crores → below ₹600 crores

    Last year we had a net slippage of overall Rs.677 crore. We would like not to breach that level, and hopefully we will be able to bring it down below Rs.600 crores.

    — Mr. Swarup Kumar Saha

Funding

  • FCNR(B) Mobilization Funding · current year · Medium confidence $100 million
    So we expect to mop up around all the three components of FCNR(B) deposits and the two borrowing routes, we expect to mobilize around $100 million in this matter, that's the estimate for us.

    — Mr. Swarup Kumar Saha

Business Growth

  • Total Business Business Growth · by FY29 · High confidence ₹4,00,000 crores
    increasing our bank’s business to Rs.4,00,000 crores by FY ’29

    — Mr. Swarup Kumar Saha

Network Expansion

  • Branches Network Expansion · by FY29 · High confidence 2,000
    and with having 2,000 branches

    — Mr. Swarup Kumar Saha

  • ATMs Network Expansion · by FY29 · High confidence 1,600
    and around 1,600 ATMs.

    — Mr. Swarup Kumar Saha

  • Business Correspondents (BCs) Network Expansion · by FY29 · High confidence 6,000 to 6,500
    We have a plan of 6,000 to 6,500 BCs.

    — Mr. Swarup Kumar Saha

New Initiatives

  • Gift City Branch Opening New Initiatives · around November · High confidence Open
    Now, the Gift City branch will open in and around November, I think that is the realistic time.

    — Mr. Swarup Kumar Saha

What to watch in Q2 FY27

Credit Growth (QoQ)

next quarter
Current 1.25%
Target Acceleration in QoQ credit growth

Why it matters

To confirm management's expectation of paced growth and utilization of the ₹15,000 crores undisbursed sanction pipeline.

So, we feel that the overall growth story of the bank in terms of credit will be between 18% to 20% going forward, notwithstanding the issue of the quarterly sequential growth. We don't feel that's a challenge, we have enough pipeline, we have undisbursed sanctions of around Rs.15,000 crores

Risks & concerns

  • Global Turmoil and Yield Movement

    medium

    Fluctuations in treasury gains are influenced by global events and yield movements, which are currently uncertain due to geopolitical tensions.

    Management acknowledged

  • MSME Slippages

    medium

    An uptick in slippages, mainly from MSME accounts (₹207 crores), was noted, potentially continuing due to global trickle-down effects, though management is monitoring it and aims to reduce overall slippages.

    Both acknowledged

  • Lack of Foreign Branch Network

    medium

    The absence of foreign branches limits the bank's ability to fully leverage FCNR(B) deposits, impacting its aspirations in this area.

    Management acknowledged

  • Legacy Issues and Investment Needs

    medium

    The bank faces legacy issues of no growth, no expansion, and limited capacity enhancement in HR and technology, requiring continuous investment which impacts cost-to-income ratio.

    Management acknowledged

  • Subdued QoQ Growth

    low

    Q1 saw lower sequential growth compared to other banks, but management stated Q1 is typically subdued and their annual guidance remains strong.

    Analyst downplayed

Q&A highlights

7 direct
QoQ Credit Growth vs. Other Banks Direct
while Q1 is always subdued, and for our bank we try to pace our growth on a QoQ basis. Therefore, if you observe that the bank's overall guidance still remains at 16% to 18%.

Analyst questioned the bank's Q1 QoQ growth being lower than peers; management clarified it's a seasonal effect and their annual guidance remains strong, supported by a ₹15,000 crore undisbursed pipeline.

Asked by Mr. Ashok Ajmera

Profitability, Other Income, and Recovery Partial
If you see sequentially regarding the treasury income, as you rightly said, that the treasury income has improved for many banks, and for our bank too compared with the March figures, we were actually having a negative contribution in March, now that is positive, of course thanks to the movement in the yields that have happened. That is an area which will always be there. You cannot wish away the fluctuations in the yield movement, and again things are heating up in the gulf area, so we have to wait and see how it stands out going forward. Of course recovery in written off accounts, it's the Q1, though it has been marginally less than the previous quarter, but recovery happens more in the second half of the year.

Analyst highlighted lower net profit, other income, and recovery. Management attributed it to treasury fluctuations and seasonal recovery patterns, indicating H2 will see more recovery.

Asked by Mr. Ashok Ajmera

Higher NPA Provisioning Direct
So additional provision that you see is actually not due to any adverse movement in the asset quality, but due to proactive building up of ECL provisions and more than what is currently required so that at the end when it kicks in on 1st April, we are in a better position in terms of that. We thought it is better to fundamentally strengthen the balance sheet and that's why you will find that this time our PCR -provision coverage ratio also improved to 92.33%.

Analyst questioned increased NPA provisioning. Management clarified it's a proactive measure for ECL implementation next year, not a sign of deteriorating asset quality, and has improved PCR.

Asked by Mr. Ashok Ajmera

FCNR(B) Deposit Mobilization Direct
So we don't have any big aspirations in terms of getting FCNR (B) because the ecosystem in our bank and geographical network doesn't facilitate that matter. So we estimate around $20 million to $25 million in that aspect. Of course, RBI has also given a window for OFCB and ECB borrowings. So we expect to mop up around all the three components of FCNR(B) deposits and the two borrowing routes, we expect to mobilize around $100 million in this matter, that's the estimate for us.

Analyst inquired about FCNR(B) potential. Management stated limited direct FCNR(B) aspirations due to lack of foreign branches but a broader $100 million target including OFCB and ECB borrowings.

Asked by Mr. Ashok Ajmera

Net Worth Increase (AFS/DTA) Direct
Out of that, the AFS is Rs.170 crores. So I have given you the AFS component, as you were asking. ... Sir, That is beacuse of the DTA adjustment.

Analyst sought clarification on the ₹224 crores additional net worth. CFO clarified it was primarily due to AFS (₹170 crores) and DTA adjustment.

Asked by Mr. Ashok Ajmera

Portfolio Rebalancing and Corporate Book Direct
In terms of the corporate side, as you have rightly observed, we are shedding some accounts. There was one central government guaranteed account where we had a huge exposure of Rs.5,000 crores at a low yield. In terms of 30th June, we had shed 50% of that and after 30th June, we had shed nearly the entire amount, a small paltry amount is still pending. So, our aspiration is to look out for opportunities to replace these assets with high-yielding ones.

Analyst asked about portfolio rebalancing. Management confirmed shedding ₹5,000 crores of low-yielding corporate assets to replace them with higher-yielding RAM and corporate opportunities, with ₹15,000 crores of unavailed corporate book.

Asked by Mr. Sushil Choksey

Gold Loan Targets and Co-lending Direct
as far as the total portfolio of co-lending is concerned in gold loan, it's somewhere around 10,000 crores as of now. And going forward, maybe since the repayment is very heavy on monthly basis, so we will be somewhere around increasing our Rs.3,000 crores during the year. With regard to gold loans under co-lending, the overall figures is around Rs.700 crores left out, and in DA it is around Rs.5,600 crores. Agri gold loan is around Rs.419 crores and retail is somewhere around Rs 5,600 crore.

Analyst inquired about gold loan targets. Management provided details on the co-lending portfolio (₹10,000 crores total), gold loans under co-lending (₹700 crores), and agri/retail gold loan breakdowns.

Asked by Mr. Sushil Choksey

MSME Slippages and Stress Outlook Direct
This run rate may continue, because whenever certain things happen globally, some trickle-down effect does happen on the MSMEs. But it is not a matter of alarm for us; we are monitoring it. If you see, our collection efficiency is improving and our overall SMA percentage is coming down. Last year we had a net slippage of overall Rs.677 crore. We would like not to breach that level, and hopefully we will be able to bring it down below Rs.600 crores.

Moderator asked about MSME slippages. Management acknowledged potential continuation due to global factors but stated it's not alarming, with improving collection efficiency and a target to reduce annual slippages below ₹600 crores.

Asked by Moderator

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Detailed narrative

Q1 FY27 Performance Overview

Punjab & Sind Bank reported an overall business growth of 15.27%, reaching ₹2,66,420 crores in Q1 FY27. This growth was supported by a 12.16% increase in deposits and a robust 19.35% rise in advances. Net Interest Income (NII) showed a significant 15.33% year-on-year growth, contributing to a net profit of ₹331 crores, up 23.05%.

Asset Quality Improvement and Proactive Provisioning

The bank's asset quality continued its improving trajectory, with Gross NPA at 2.21% and Net NPA at 0.65%. The Provision Coverage Ratio (PCR) strengthened to 92.33%. Management highlighted proactive provisioning of ₹150 crores for ECL (Expected Credit Loss) this quarter, aimed at strengthening the balance sheet ahead of the new ECL regime, rather than reflecting adverse asset quality movements.

Strategic Portfolio Rebalancing and RAM Focus

The bank is actively rebalancing its loan portfolio, with RAM (Retail, Agri, MSME) advances now constituting 60% of the total book. Retail advances grew by 36%, Agri by over 25%, and MSME by 32%. The strategy involves shedding low-yielding corporate accounts, such as a ₹5,000 crore central government guaranteed account (50% shed by June 30), to replace them with higher-yielding assets, supported by a ₹15,000 crore undisbursed corporate book.

Fee Income Growth and Operational Efficiency

Core fee income grew by 13.89% in Q1, with a target of ₹900-1000 crores for the current year. The cost-to-income ratio dipped slightly to 60.21%, and the bank aspires to bring it below 50% within two to three years through digital initiatives and process optimization. Collection efficiencies improved to 95%, and the total SMA percentage is targeted to be less than 3%.

Funding and Capital Adequacy

The Capital Adequacy Ratio (CAR) stands at a healthy 17.61%. The bank aims to mobilize approximately $100 million through a combination of FCNR(B) deposits, OFCB (Overseas Foreign Currency Borrowings), and ECB (External Commercial Borrowings), despite limited direct FCNR(B) aspirations due to the lack of foreign branches.

Network Expansion and Digital Initiatives

Punjab & Sind Bank is expanding its physical and digital footprint. Plans include increasing total business to ₹4,00,000 crores by FY29, with 2,000 branches, 1,600 ATMs, and 6,000-6,500 Business Correspondents. The Gift City branch is expected to open around November, and new digital initiatives like Digi Gold loans and CBDC are slated for launch.

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