New Delhi [India], October 16 (ANI): Punjab National Bank (PNB) reported a 12.8 per cent year-on-year rise in net profit in the September quarter of FY27, supported by higher interest income and improving asset quality, even as the bank said it sees no immediate need to raise deposit rates following the Reserve Bank of India's recent repo rate hike.

PNB's Managing Director and CEO Ashok Chandra, addressing a post-earnings press conference on Friday, said, 'The bank recorded a net profit of Rs 5,532 crore in Q2, which is an all-time high, and it has grown at 12.8% year-on-year.'

The bank's net interest income (NII) rose 10.8 per cent to Rs 11,601 crore from Rs 10,468 crore in the corresponding quarter last year. Operating profit increased 4.2 per cent to Rs 7,532 crore.

On asset quality, the gross non-performing assets (NPA) ratio improved to 2.55 per cent from 2.78 per cent in the preceding quarter, while the net NPA ratio declined to 0.25 per cent from 0.28 per cent.

Responding to ANI's question on the outlook for deposit rates following the RBI's 25-basis-point repo rate hike, Chandra said, 'I think we are not in a hurry to go in the market, raise the deposit rate, because as of now, we are quite comfortable.'

He explained that the bank's credit-deposit ratio, currently around 75 per cent, provides sufficient flexibility to support lending growth even with deposit growth of 8-9 per cent.

PNB's global advances grew 14.7 per cent year-on-year to Rs 13.41 lakh crore, while deposits rose 9.9 per cent to Rs 17.77 lakh crore.

Answering media queries, Chandra said the RBI's rate hike could improve the bank's net interest margin (NIM) by around 6-7 basis points in the October-December quarter.

The bank's global NIM improved to 2.58 per cent in the September quarter from 2.50 per cent in the preceding quarter.

He also indicated that the bank could achieve credit growth of around 13-14 per cent during FY27, against its earlier guidance of 12-13 per cent, supported by demand across retail, agriculture and MSME segments.

Explaining the slower growth in operating profit, Chandra said treasury income declined to around Rs 750 crore from Rs 1,716 crore in the year-ago quarter, weighing on overall operating earnings.

However, he said core operating profit, excluding treasury income and recoveries from written-off accounts, grew 29.4 per cent year-on-year.

The bank also mobilised USD 2.7 billion through its foreign-currency non-resident deposit campaign, exceeding its USD 2.5 billion target, with the funds used to replace higher-cost deposits and certificates of deposit. (ANI)