Citi has reiterated its ‘Sell’ rating on Punjab National Bank (PNB) with a target price of ₹96/share, highlighting ongoing challenges despite management’s optimistic guidance. The bank targets a sustainable return on assets (ROA) of 1%, supported by lower credit costs and controlled slippages. However, Citi remains cautious about PNB’s ability to sustain net interest margins (NIMs) in the 2.9-3% range amidst persistent yield pressures.
PNB has reiterated its advances growth guidance of 11-12% and deposits growth of 9-10% year-on-year. Improvement in asset quality and corporate recoveries continue to provide some visibility on balance sheet stability. However, Citi flagged concerns regarding systemic headwinds in the banking sector and lingering pressures on margins, which justify the ‘Sell’ stance on the stock.
