Punjab National Bank (PNB) expects a moderate impact on its net interest margin (NIM) if the Reserve Bank of India (RBI) decides to cut interest rates during the upcoming February Monetary Policy Committee (MPC) meeting. According to PNB’s Executive Director Kalyan Kumar, the impact will not be substantial and will only be noticeable in the short term. Kumar emphasized that the bank’s NIM will not be significantly affected by March 2025.
Despite the potential impact on NIM, PNB’s asset quality has improved on a year-on-year basis. The bank’s gross non-performing asset ratio decreased to 4.09% in the latest quarter, compared to 6.23% in the same period last year. Kumar attributed this improvement to the bank’s efforts to contain slippages, which stood at Rs 1,774 crore, one of the lowest in the industry.
Kumar praised PNB’s performance, stating that the bank has done a “very nice job” in managing its slippages despite having a large book of Rs 11.10 lakh crore. He highlighted that the bank’s ability to contain slippages is one of the best in the industry.
Overall, PNB’s Executive Director expressed confidence that the bank’s NIM will not be significantly impacted by rate cuts, and that the bank’s asset quality will continue to improve.