Punjab National Bank targets cost-to-income ratio below 50% this fiscal year

Punjab National Bank (PNB) is aiming to bring its cost-to-income ratio below 50 per cent in the current financial year, and further down to 45 per cent by 2028-29. The country's second-biggest lender reported a cost-to-income ratio of 50.38 per cent in the first half of the current fiscal year.

Punjab National Bank (PNB) has outlined plans to reduce its cost-to-income ratio below 50 per cent during the current financial year. According to MD and CEO Ashok Chandra, the lender intends to further bring this metric down to approximately 45 per cent by the financial year 2028-29.

The bank's cost-to-income ratio stood at 50.38 per cent in the first half of the current fiscal year, improving from 53.3 per cent in September 2025. PNB is focusing on rationalising expenses, maximising profitability, and sensitising its various units to improve overall operational efficiency.

Chandra noted that internal review meetings now routinely focus on the cost of deposits, yield on advances, fee-based income, and methods to lower operating expenses. The bank sees further scope for cost reduction across multiple operational areas.

In terms of financial performance, PNB has targeted an income of Rs 6,000 crore over the next few quarters. The institution has maintained consistency in operating profit, net profit, and other key parameters across the past four quarters. For the second quarter ended September 2026, PNB posted a net profit of Rs 5,532 crore—marking a 13 per cent year-on-year rise driven by improved core income and moderated bad loans.

This performance was achieved despite treasury losses of approximately Rs 1,000 crore during the quarter. Treasury income declined to Rs 753 crore in the second quarter, compared to Rs 1,769 crore in the corresponding period of the previous year.

The bank highlighted the performance of its core operating profit—which excludes treasury gains and recoveries—as an indicator of underlying business strength. Core operating profit grew by about 29 per cent year-on-year during the quarter, following a 32 to 34 per cent growth recorded in the preceding quarter.

"Punjab National Bank's focused approach on rationalizing expenses and improving core operating profit demonstrates strong financial discipline. Managing to post solid net profits despite notable treasury losses highlights the underlying resilience of their core operations. Driving the cost-to-income ratio down toward 45 percent over the next few years will require sustained operational efficiency and strict cost management across all business units." — Dr. Shishir Gupta, Founder & CEO, StartupLanes