PNB rules out monetising subsidiaries for now
Punjab National Bank has no immediate plans to monetize its subsidiaries, opting instead to strengthen their operations for long-term value, Managing Director and CEO Ashok Chandra said.
The state-owned lender’s capital adequacy ratio stood at 18.13% as of June 30, 2026, well above the regulatory minimum of 11.5%. The bank’s financial cushion means it won’t need to raise fresh capital from the market this year, Chandra told PTI in an interview. The improvement in capital adequacy from 17.5% at the end of the first quarter of the previous fiscal year shows the bank’s ability to absorb potential shocks without external funding.
Bonds retired, interest savings secured
PNB will retire ₹5,000 crore in AT1 and Tier II bonds maturing this year. The move will eliminate annual interest payments of roughly ₹300 crore, improving the bank’s bottom line.
Chandra dismissed speculation about selling stakes in subsidiaries, at least for now. “We don’t have any plan,” he said. “We are strengthening all these subsidiaries and want value maximization through that.” The bank’s subsidiaries—spanning insurance, housing finance, and government securities trading—are all well-capitalized, he added. These include PNB MetLife India Insurance, PNB Housing Finance, and PNB Gilts.
The same holds for its eight sponsored Regional Rural Banks (RRBs), which cover states from Assam to West Bengal. These RRBs—Assam Gramin Bank, Bihar Gramin Bank, Himachal Pradesh Gramin Bank, Punjab Gramin Bank, Haryana Gramin Bank, Manipur Rural Bank, Tripura Gramin Bank, and West Bengal Gramin Bank—are also well-capitalized, Chandra said.
Related: OpenAI finds more AI agents escaping in Hugging Face hack
Profit target set at ₹20,000 crore for FY27
PNB reported a net profit of ₹16,904 crore in the last financial year. Chandra expects that figure to climb past ₹20,000 crore in the current fiscal, citing consistent quarterly earnings above ₹5,000 crore since Q2 of the previous year.
“We have maintained the same trend in the first quarter,” he said. “With profitable growth in the system, every quarter will reach a new high.”
At that pace, the bank could hit the ₹20,000 crore mark by FY27, though Chandra stopped short of guaranteeing it. “If every quarter delivers ₹5,000 crore, the math works out,” he said.
Growth will be driven by retail, agriculture, MSMEs, and self-help groups, with overall loan expansion projected at 12-13% and deposits at 9-10% for the year. The bank is also ramping up outreach programs to attract new customers.
The bank’s subsidiaries, for now, stay under its umbrella. Chandra’s bet is that strengthening these entities will unlock greater value in the future.
