PNB aims to bring cost-to-income ratio below 50% this fiscal, 45% by FY29: MD

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Chandra said the bank was working on two key areas — rationalisation of expenses and maximisation of profits — while sensitising its various units about the importance of improving operational efficiency.

By PTI

Updated - October 25, 2026 at 11:07 AM.

Punjab National Bank (PNB) aims to bring its cost-to-income ratio below 50 per cent in the current financial year and further reduce it to around 45 per cent by 2028-29, said Ashok Chandra, MD and CEO of the country's second-biggest lender.

The bank's cost-to-income ratio stood at 50.38 per cent in the first half of the current fiscal year, down from 53.3 per cent in September 2025, as it focuses on rationalising expenses and maximising profitability, he told PTI in an interview.

"We are aiming to go below 50 per cent this financial year. That is the first target we have set for ourselves. In the next two years, by 2028-29, we should be somewhere around 45 per cent," he said.

Chandra said the bank was working on two key areas — rationalisation of expenses and maximisation of profits — while sensitising its various units about the importance of improving operational efficiency.

Every review meeting of the bank now focuses on the cost of deposits, yield on advances, fee-based income and ways to reduce operating expenses, he said, adding that the bank sees scope for cutting costs in several other areas and is working towards improving efficiency.

Observing that PNB had faced several challenges over the years pushing its cost-to-income ratio relatively high, he said the bank is now making concerted efforts to bring it down.

Chandra also said the bank is targeting Rs 6,000 crore in income over the next few quarters.

The country's second-largest lender has maintained consistency in operating profit, net profit and other key parameters over the past four quarters, and expects this trend to continue, he said.

PNB has already posted a net profit of Rs 5,500 crore and is targeting further growth in operating profit, which would also support an increase in net profit, he said.

For the second quarter ended September 2026, PNB reported a 13 per cent rise in net profit to Rs 5,532 crore, driven by improved core income and a moderation in bad loans. The profit recorded was the highest ever in a quarter.

Despite treasury losses of around Rs 1,000 crore during the quarter, the bank managed to maintain growth in operating profit, he noted.

Treasury income declined by Rs 1,000 crore to Rs 753 crore in the second quarter from Rs 1,769 crore a year ago.

He highlighted the strong performance of the bank's core operating profit, which excludes treasury gains and recoveries, as a key indicator of its underlying business strength.

Core operating profit grew around 29 per cent year-on-year during the quarter, following a 32-34 per cent growth in the previous quarter, he said.

"We are already at Rs 5,500 crore, and we are aiming to grow the operating profit, despite the treasury loss of around Rs 1,000 crore in this particular quarter compared to September 2025.

"Still, we have maintained the operating profit growth. I think just wait for a few quarters," he said, in response to a query about when the market can expect PNB to move into the Rs 6,000 crore quarterly bottom line club.

The sustained growth in core operating profit gives the bank confidence in the strength of its key business operations and its ability to maintain profitability momentum in the coming quarters, he added.

Published on October 25, 2026

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