PNB Q2 Profit Jumps 13%; Plans RD Campaign Amid Market Volatility
Punjab National Bank posted a nearly 13% year-on-year rise in net profit for the September quarter, though operating profit growth was muted due to lower treasury income. The bank’s MD and CEO, Ashok Chandra, said PNB plans to launch a special campaign to promote its recurring deposit (RD) schemes, seeing it as the "right time to pitch this product" given current stock market volatility. The bank's asset quality improved, with gross non-performing assets (NPAs), or bad loans, falling to 2.55% of gross advances from 3.45% a year ago. PNB guided for credit growth of 13-14% for the full year.
What this means
PNB's results reveal two important trends. First, even large banks are feeling the pinch from volatile bond markets, with treasury gains becoming less reliable contributors to profit. This places a greater burden on core lending and fee income. Second, the plan to actively market RDs is a shrewd tactical move. It shows the bank is reading retail investor sentiment by offering a "safe haven" product during a period of equity market uncertainty. This classic flight-to-safety strategy can help banks attract stable, low-cost retail funds, an approach other lenders may emulate if market jitters persist.
Most affected: Public sector banks and retail depositors
Key takeaway: In a volatile market, actively marketing simple, safe deposit products can be an effective strategy to attract retail funds and lower the overall cost of deposits.
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