PNB Housing Finance Q3 Results: Net profit up 11% on strong retail disbursements, stable asset quality

PNB Housing Finance Ltd on Wednesday (January 21) reported a higher net profit of ₹521 crore for the third quarter, up 10.6% year-on-year from ₹471 crore in the same period last year. Net interest income (NII) for Q3 stood at ₹757 crore, marking a 12.8% increase from ₹671 crore reported in Q3FY25.

The company's retail loan assets rose 16% year-on-year to ₹81,931 crore as of December 31, 2025, accounting for 99.7% of the total loan assets. The affordable and emerging markets segment grew 31% year-on-year and contributed 39% to the retail loan assets. Total loan assets increased 14.3% year-on-year and 3% sequentially to ₹82,203 crore, while the corporate loan book declined sharply by 78.1% to ₹272 crore over the year-ago quarter.

Disbursements during Q3FY26 grew 15.6% year-on-year and 3.7% quarter-on-quarter to ₹6,217 crore. Disbursements in the affordable and emerging markets segment rose 11.3% year-on-year to ₹2,935 crore and continued to account for around 50% of total retail disbursements.

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Within the retail book, affordable loan assets surged 86% to ₹7,140 crore over last year, emerging markets loan assets grew 20.3% to ₹24,998 crore, while the prime segment increased 8.1% to ₹49,793 crore. Assets under management rose 12.0% year-on-year and 2.6% sequentially to ₹86,048 crore.

On profitability, pre-provision operating profit grew 8.4% year-on-year but declined 2.9% quarter-on-quarter to ₹628 crore. Excluding the estimated ₹6-crore impact of the new labour code, pre-provision operating profit rose 9.4% year-on-year and 1.9% sequentially to ₹634 crore.

Operating expenditure increased 16.7% year-on-year and 10.5% quarter-on-quarter to ₹240 crore. Yield moderated to 9.72% in Q3FY26, while the cost of borrowing declined to 7.50%, resulting in a loan spread of 2.22%. Net interest margin stood at 3.63%, while gross margin net of acquisition cost was 3.98%.

Asset quality remained stable, with gross NPA at 1.04% as of December 31, 2025, compared with 1.19% a year ago, while net NPA stood at 0.68%. Retail GNPA was at 1.04%, and corporate GNPA remained nil since June 30, 2024.

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Recoveries from the written-off pool amounted to ₹49 crore during the quarter, resulting in a credit cost of minus 19 basis points in Q3FY26. Return on assets stood at 2.40% for Q3FY26 on an annualised basis and 2.57% for 9MFY26.

The company maintained a strong capital position, with the capital-to-risk-weighted assets ratio at 29.46% as of December 31, 2025. Tier I capital stood at 28.92%, while tier II capital was at 0.55%, reflecting a comfortable capital adequacy buffer.