Citi has reiterated its ‘Sell’ rating on Punjab National Bank (PNB) with a target price of ₹91, expressing concern over the bank’s deteriorating NIM profile and elevated slippages in the fourth quarter, despite headline profitability looking strong due to non-core gains.
PNB posted a profit above 1% RoA, but Citi attributed this to treasury gains and recoveries, rather than core operating strength. NIM contracted 12 basis points QoQ, signalling margin pressure due to higher cost of funds and limited pricing power in a competitive lending environment.
Citi further highlighted that slippages were higher than anticipated, even as the bank offered FY26 credit growth guidance of 11–12% and deposit growth of 9–10%. However, execution risk remains high, and with no visibility of meaningful RoA expansion or sustainable margin improvement, the brokerage prefers to stay cautious on the stock.
Disclaimer: The above views are those of the brokerage and not the publication. Investors should consult a certified financial advisor before making investment decisions.
