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PNB Aims for ₹20,000 Crore Annual Profit by FY27 via Strategic Expansion and Acquisition Finance

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PNB Aims for ₹20,000 Crore Annual Profit by FY27 via Strategic Expansion and Acquisition Finance

Punjab National Bank (PNB) MD and CEO Ashok Chandra has projected that the bank’s net profit will exceed ₹20,000 crore by fiscal year 2027, fueled by sustained financial performance and a strategic emphasis on retail, agriculture, MSME, and new acquisition financing sectors.

Following a net profit of ₹16,904 crore in the previous financial year, the public sector lender has consistently maintained quarterly net profits exceeding ₹5,000 crore since the second quarter of the last fiscal year.

Chandra noted that this trend has continued into the first quarter of the current fiscal year. “With the profitable growth currently happening within the system, I am confident that we will consistently surpass the ₹5,000 crore quarterly mark, reaching new heights with each period,” he stated during an interview with PTI.

Regarding the FY27 target, Chandra suggested that maintaining current quarterly profit levels would likely lead the bank to the ₹20,000 crore milestone.

To reach these objectives, the bank is implementing large-scale quarterly outreach initiatives. Key focus areas for asset creation include the retail, agricultural, MSME, and self-help group sectors. For the current financial year, the bank anticipates loan growth of 12-13%, while deposits are expected to grow by 9-10%.

Additionally, Chandra announced that the bank plans to enter the acquisition finance market in the third quarter of this financial year, following recent regulatory shifts. The Reserve Bank of India (RBI) recently updated guidelines, increasing the lending limit for acquisition finance to 75% of the total deal value, up from the 70% previously proposed.

“The acquisition finance market offers significant opportunities. Our board has already approved the policy for acquisition financing,” Chandra said. “We are currently seeking suitable partners and intend to begin operations in this segment from Q3 onwards, starting with domestic entities to help diversify our asset portfolio.”

Per RBI regulations, banks engaging in acquisition finance must adhere to specific conditions, such as requiring corporate guarantees from the acquiring company and ensuring the post-acquisition debt-to-equity ratio does not exceed 3:1. Furthermore, acquired equity shares or convertible debentures must be free of encumbrances. Borrowers must also possess a minimum net worth of ₹500 crore, demonstrate three years of net profit, and ensure unlisted entities maintain investment-grade ratings.

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