Punjab & Sind Bank — Q4 FY26 earnings call

Call held 28 Apr 2026

Management summary

Punjab & Sind Bank reported a strong Q4 FY26, achieving its highest ever net profit of Rs.1,322 Crore, a 30.12% YoY growth. The bank saw robust business expansion with total business growing 14.94% to Rs.2,63,652 Crore, driven by 18.29% growth in gross advances. Asset quality improved significantly with GNPA at 2.4% and NNPA at 0.79%. However, the bank noted a continuous quarter-on-quarter reduction in NIM, which stood at 2.55% for the 12-month period, and an uptick in slippages in Q4, mainly from MSME accounts.

Highlights

  • Total business grew by 14.94% to Rs.2,63,652 Crore, marking a historic growth for the bank.

  • Net profit for the year reached Rs.1,322 Crore, the highest ever in the bank's history, growing by 30.12%.

  • Gross Advances showed a very robust growth of 18.29%.

  • Asset quality improved significantly with Gross NPA reducing to 2.4% and Net NPA to 0.79%.

  • Core fee income grew by over 22% to Rs.759 Crore, demonstrating consistent growth.

Concerns

  • Net Interest Margin (NIM) for the 12-month period was 2.55%, with a continuous quarter-on-quarter reduction.

  • Slippages in Q4 increased to Rs.355 crores from Rs.168 crores in the previous quarter, primarily due to MSME accounts.

  • Management acknowledged potential future cash flow impact on small MSMEs if geopolitical situations linger.

Key financials

  1. Net Profit (FY) ₹1,322 Cr +30.1%YoY
  2. Total Business (FY) ₹2.64L Cr +14.9%YoY
  3. Gross Advances Growth (FY) 18.3%
  4. Gross NPA 2.4%
  5. Net NPA 0.79%
  6. NIM (12-month) 2.5%
  7. Return on Assets 79%

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.

Guidance & targets

Deposit Growth

  • Deposit growth Deposit Growth · current year · High confidence 13% to 14%
    For the current year we expect a deposit growth of 13% to 14%.

    — Mr. Swarup Kumar Saha

Advances Growth

  • Advances growth Advances Growth · current year · High confidence 16% to 18%
    Advances growth of 16% to 18%.

    — Mr. Swarup Kumar Saha

RAM Percentage

  • RAM as percentage of total advances RAM Percentage · current year · High confidence cross 60%
    RAM we expect to cross 60% of the total advances.

    — Mr. Swarup Kumar Saha

Asset Quality

  • Gross NPA Asset Quality · current year · High confidence below 2%
    Gross NPA to be below 2%.

    — Mr. Swarup Kumar Saha

Provision Coverage Ratio

  • PCR Provision Coverage Ratio · current year · High confidence 92% to 93%
    PCR, we'll maintain the last year's level of guidance 92% to 93%.

    — Mr. Swarup Kumar Saha

Recovery and Upgradation

  • Recovery and upgradation Recovery and Upgradation · current year · High confidence cross Rs.1000 Crore
    Recovery and upgradation will continue to be our focus and we would like to cross Rs.1000 Crore this year as well.

    — Mr. Swarup Kumar Saha

Credit Cost and Slippage Ratio

  • Credit cost and slippage ratio Credit Cost and Slippage Ratio · current year · High confidence below 1%
    Credit cost and slippage ratio should be below 1%.

    — Mr. Swarup Kumar Saha

Net Interest Margin

  • NIM Net Interest Margin · by the end of the current year · High confidence 2.65% to 2.70%
    So overall, we feel that by the end of the current year, we should be touching 2.65% to 2.70% in terms of the NIM.

    — Mr. Swarup Kumar Saha

Total Business

  • Total business Total Business · by the current financial year · High confidence Rs.3,00,000 crores
    In terms of macro numbers, I'll say that we intend to achieve Rs.3,00,000 crores by the current financial year, that's our aspiration figure.

    — Mr. Swarup Kumar Saha

  • Total business Total Business · by financial year FY29 · High confidence Rs.4,00,000 crores
    We have taken a board approval to achieve Rs.4,00,000 crores by financial year FY 29.

    — Mr. Swarup Kumar Saha

What to watch in Q1 FY27

Net Interest Margin (NIM)

By end of current year (FY27)
Current 2.55% (12-month period)
Target Towards 2.65% to 2.70%

Why it matters

NIM is a key profitability driver for banks, and management has set a clear target for improvement after recent compression.

So overall, we feel that by the end of the current year, we should be touching 2.65% to 2.70% in terms of the NIM.

Risks & concerns

  • NIM compression

    medium

    Continuous quarter-on-quarter reduction in NIM, standing at 2.55% for 12-month period, attributed to low CASA and repo rate fluctuations.

    Analyst acknowledged

  • Increased slippages from MSME accounts

    medium

    Slippages increased to Rs.355 crores in Q4 from Rs.168 crores in the previous quarter, primarily due to residual stress in MSME segments.

    Both acknowledged

  • Potential impact of geopolitical situations on MSMEs

    low

    Geopolitical situations could lead to future cash flow impact on small MSMEs if they linger, though government is aware and handling sectorally.

    Both acknowledged

  • ECL provisioning impact

    low

    New RBI ECL guidelines are expected to have an impact of Rs.600-800 crore, which will be absorbed over 5 years and is not expected to significantly impact capital adequacy.

    Analyst acknowledged

Q&A highlights

7 direct
ECL guidelines and provisioning impact Direct
What we are expecting anywhere between Rs.600 to Rs.800 crore. Although it's not right to give a number like this at this point of time since my numbers are yet to be calculated. But overall what I'm saying here is over a five year of time, this is quite comfortable and we can easily absorb it and over a period of time since our credit quality also have improved significantly.

Analyst inquired about the impact of new RBI ECL guidelines, and management provided an estimated impact of Rs.600-800 crore over 5 years, stating it would be easily absorbed and not impact capital adequacy much.

Asked by Mr. Ashok Ajmera

Slippage trends in Q4 Direct
In terms of the SMA, yes, if you see the overall number of SMA 1 and SMA 2 above Rs.5 Crore, you'll find that in the December quarter, say March 2026 quarter, it has significantly come down. As I told earlier also, these numbers look inflated for the bank in view of the two state government guaranteed accounts.

Analyst noted increased slippages in Q4 (Rs.355 crores vs Rs.168 crores) but also reduced SMA 2, seeking clarification on the underlying reasons, which management attributed to MSME stress and recognition of weak accounts.

Asked by Mr. Ashok Ajmera

NIM compression and future plans Direct
Yeah, we are conscious of this. The bank has a historic low NIM because of the low CASA and the fluctuations of the repo rate also has impacted it. But, we feel that now we have absorbed the entire cycle of the repo cut of 125 bps and we have taken various steps to improve our lending in the high yielding side particularly in the AGRI & MSME segment.

Analyst highlighted continuous quarter-on-quarter NIM reduction, and management explained the reasons (low CASA, repo rate fluctuations) and outlined strategies to improve NIM to 2.65%-2.70% by year-end.

Asked by Mr. Ashok Ajmera

Impact of geopolitical situation on portfolio Partial
No, not really. I think government is much aware of this, they are going to sectorally handle it. I think, they may be working on some packages for various segments. As of now in our portfolio, yeah, small MSMEs will get impacted if this lingers on a bit more than normal.

Analyst asked about the visible impact of geopolitical situations, and management acknowledged potential future impact on small MSMEs if the situation persists, but noted government awareness and planned sectoral handling.

Asked by Mr. Ashok Ajmera

Three key strategic changes for bank strengthening Direct
First of all, the threats that are coming, the media reports that are coming in various ways, the new threat of Anthropic is also being playing out in its own way... I think the operational resilience has to be upgraded in a large way... Number 2, we still need to work very strongly on our branch network and expanding in the areas by culling out areas by data points where we can expand much more productively... Thirdly, we have to work on our digital transformation.

Analyst asked for the top three strategic initiatives to strengthen the bank, and management detailed operational resilience, branch network expansion, and digital transformation.

Asked by Mr. Sushil Choksey

Gold loan growth drivers and CRM benefits Direct
Yeah, so in the gold loan portfolio, the key drivers we are now working on are both organic and inorganic. We have doing a lot of organic growth, we have identified branches which can do gold loans... The 2nd question that you had regarding the CRM, we have just established the CRM model, the chat bots. These are all in today's scenario, a basic necessity in terms of customer experience.

Analyst inquired about growth drivers for gold loans and benefits from CRM automation, receiving details on organic/inorganic strategies and improved customer experience through CRM and chatbots.

Asked by Mr. Brijesh Manghi

Tie-ups for RAM segments (housing, auto, EV) Direct
Sir, somewhere around 85 tie-ups have been done for the housing builders during the last financial year and as far as the co-lending partners are concerned, around 11 partners are there as of now. With regard to the vehicle types, we have done with Mahindra, Maruti and we're also looking for the going forward for Hyundai & Toyota.

Analyst sought specifics on tie-ups for RAM segments, and management provided numbers for housing builder tie-ups (85), co-lending partners (11), and auto OEM partnerships, with plans for more.

Asked by Mr. Sushil Choksey

Overall business growth strategy and manpower Direct
In terms of macro numbers, I'll say that we intend to achieve Rs.3,00,000 crores by the current financial year, that's our aspiration figure. We have taken a board approval to achieve Rs.4,00,000 crores by financial year FY 29.

Analyst questioned the bank's strategy for faster overall business growth given its low base, prompting management to outline qualitative growth, FY27 target of Rs.3,00,000 crores, and FY29 target of Rs.4,00,000 crores.

Asked by Mr. Ashok Ajmera

3 min read 7 chapters

Detailed narrative

Robust Business Performance and Profitability

Punjab & Sind Bank achieved a historic total business growth of 14.94% in FY26, reaching Rs.2,63,652 Crore. This was supported by a 12.37% growth in deposits and a strong 18.29% increase in Gross Advances. The bank recorded its highest ever net profit of Rs.1,322 Crore for the financial year, representing a 30.12% growth, with Q4 net profit contributing Rs.422 Crore, a 34.82% increase. Core fee income for the year grew by over 22% to Rs.759 Crore, and non-interest income saw a 13.47% growth.

Significant Asset Quality Improvement

The bank demonstrated robust asset quality improvements, with Gross NPA reducing to 2.4% and Net NPA to 0.79%. The Provision Coverage Ratio (PCR) stood at 90.91%, and the slippage ratio was contained at 0.70% with a credit cost of 0.06%. Collection efficiency notably improved from 67% in March 2022 to 96% in March 2026. While Q4 saw an uptick in slippages to Rs.355 crores, management attributed this to recognizing residual stress in MSME accounts, noting that the overall SMA book (excluding state government guaranteed accounts) is around 3%.

Net Interest Margin (NIM) Outlook and Strategy

The 12-month Net Interest Margin (NIM) was 2.55%, with management acknowledging a continuous quarter-on-quarter reduction. This compression was attributed to low CASA and fluctuations in the repo rate. However, the bank expects NIM to improve and touch 2.65% to 2.70% by the end of the current financial year (FY27). This improvement is anticipated through increased lending in high-yielding segments like Agri and MSME, and the full absorption of the 125 bps repo rate cut cycle.

Strategic Growth Initiatives and Expansion

Punjab & Sind Bank has set ambitious growth targets, aiming for a total business of Rs.3,00,000 crores by the current financial year (FY27) and Rs.4,00,000 crores by FY29. To achieve this, the bank projects deposit growth of 13-14% and advances growth of 16-18% in FY27, with RAM expected to cross 60% of total advances. Strategic initiatives include expanding the branch network with plans to open 200 new branches, introducing a marketing vertical, and implementing tab banking for customer acquisition. The bank also plans to launch its GIFT City operations by October 2026.

Digital Transformation and Operational Resilience

The bank is significantly investing in its digital capabilities and operational resilience, with plans to double its budget for AI, cyber, and digital footprint. A resilience operation center is expected to be implemented within 3-4 months to enhance cybersecurity. Furthermore, the bank aims to launch UnIC 2.0 by the end of the financial year, which will incorporate value-added features to improve customer experience and facilitate new customer acquisition. The BC network is also being expanded to over 4000 by year-end.

Human Resource Development and Leadership Grooming

Punjab & Sind Bank is actively focusing on human resource development through its 'Navjyoti' project. Phase 2 of this project is dedicated to skill development, particularly for executives. A new state-of-the-art training college has been established in Chandigarh, and 125 officers from Scale IV, V, and VI will undergo specific training and personal coaching to groom them for future leadership roles. The bank is also collaborating with various management institutes like NIBSCOM, MDIs, IIMs, and SBI Academy for advanced training programs.

ECL Provisioning Framework and Capital Adequacy

Regarding the new RBI Expected Credit Loss (ECL) guidelines, the bank anticipates an impact of Rs.600-800 crore. This impact is expected to be spread over a 5-year glide path and will be absorbed from reserves, without significantly affecting the bank's capital adequacy. Management expressed comfort with this outlook, citing improved credit quality and reduced Probability of Default (PD) numbers, which will help mitigate the overall ECL impact.

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