Punjab National Bank aims to bring the PNB cost-to-income ratio below 50% in fiscal 2026–27 and to around 45% by 2028–29, Managing Director and CEO Ashok Chandra said on October 25, 2026. The ratio stood at 50.38% in the first half of FY27, compared with 53.3% in September 2025, as the lender worked to contain expenses and strengthen earnings.
Key Takeaways
- The below-50% goal for FY27 and roughly 45% goal for FY29 remain management targets.
- PNB is reviewing deposit costs, lending yields, fee income and operating expenses to improve efficiency.
- September-quarter net profit rose 13%, while core operating profit grew around 29% despite weaker treasury income.
Table of Contents
- PNB cost-to-income ratio approaches the first target
- Expense reviews extend to funding costs and fee income
- Core profit growth offsets treasury pressure
- Conclusion
PNB cost-to-income ratio approaches the first target
PNB’s first-half ratio was 2.92 percentage points below the September 2025 level. Moving below 50% would mark the next step in a longer-term effort to reduce the share of income absorbed by operating costs.
“We are aiming to go below 50 per cent this financial year. That is the first target we have set for ourselves,” Chandra said. He put the subsequent ambition at around 45% by 2028–29.
A lower cost-to-income ratio indicates improved operating efficiency, but it can reflect both expense restraint and income growth. Chandra’s plan addresses both sides rather than relying solely on spending cuts.
| Item | Details |
|---|---|
| September 2026 quarterly net profit | Rs 5,532 crore, up 13% year on year. |
| September 2026 treasury income | Rs 753 crore, compared with Rs 1,769 crore a year earlier. |
| September 2026 core operating profit growth | Around 29% year on year, excluding treasury gains and recoveries. |
| Preceding-quarter core operating profit growth | 32–34%, as stated by Chandra. |
Expense reviews extend to funding costs and fee income
Chandra said every review meeting now focuses on the cost of deposits, yield on advances, fee-based income and opportunities to reduce operating expenses. The bank is also stressing the importance of operational efficiency across its units.
He said PNB had faced challenges over the years that left its cost-to-income ratio relatively high, and that the bank still saw scope to cut costs in several areas. He did not provide a quantified expense-reduction programme.
PNB’s September 2026 financial disclosure listings provide access to the quarter’s results release, investor presentation and earnings-call materials. The bank’s disclosure page lists the earnings-call transcript dated October 23 for the quarter and half-year ended September 30, 2026.
Core profit growth offsets treasury pressure
PNB reported its highest quarterly net profit in the three months ended September 2026, supported by improved core income and a moderation in bad loans.
Chandra highlighted core operating profit, which excludes treasury gains and recoveries, as a measure of underlying business performance. It grew around 29% year on year, following growth of 32–34% in the preceding quarter.
Treasury income fell sharply, but Chandra said the bank still maintained operating-profit growth. That distinction matters for the efficiency programme: stronger recurring operations can support the ratio even when investment-related income weakens.
Conclusion
The next benchmark is whether PNB can bring its cost-to-income ratio below 50% for FY27. The longer-term 45% ambition remains a management goal for FY29, with progress dependent on both expense discipline and income growth.
Read More News
Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
