SBI vs Punjab National Bank (2026): ROA, NPAs, Scale, Valuation & Which Is Better?

SBI vs PNB: Q1 FY2027 scoreboard

How should an investor normalise PNB?

Look at operating profit and NII before celebrating the PAT growth.

Operating profit increased approximately 6.2%.

NII increased only 2.1%.

That is much closer to the underlying earnings trajectory.

External analysis of the results estimates that once the prior-year tax distortion is removed, underlying PAT growth is closer to the mid-single digits.

This does not make PNB's quarter weak.

It makes the quarter interpretable.

SBI did not need a tax-base effect to grow NII almost 15%

This is why SBI's earnings quality is stronger in the current comparison.

SBI NII reached approximately ₹46,992 crore.

The bank combined:

• High-teens credit growth.
• Low credit cost.
• Very low slippages.
• A huge CASA franchise.
• Stable domestic margin around 3%.

The result is less spectacular on a percentage headline.

It is more repeatable.

PNB's real achievement is not PAT growth. It is the disappearance of the old NPA problem.

That is the structural story.

GNPA declined to 2.78% from 3.78% a year earlier.

NNPA declined to just 0.28%.

Provision coverage including technical write-offs reached approximately 97.23%.

These numbers would have looked almost impossible during the worst phase of India's PSU-bank NPA cycle.

How can PNB have higher GNPA but lower NNPA than SBI?

Because PNB has provisioned more heavily against the bad-loan stock.

Gross NPA measures loans classified as non-performing before provisions.

Net NPA measures the remaining exposure after provisions.

PNB therefore still has more bad loans relative to advances.

But it has already recognised and provided for a very large share of expected losses.

SBI's gross asset quality remains better

GNPA at 1.47% is nearly half PNB's 2.78%.

The slippage ratio is also lower.

This indicates SBI currently generates fewer non-performing assets relative to its enormous loan book.

PNB wins on residual net exposure after provisioning.

SBI wins on the underlying stock of problem loans.

PNB's loan-repair story is visible inside individual segments

Corporate GNPA has fallen to an extremely low level.

Retail GNPA is also below 1%.

The weaker pockets remain agriculture and MSME, although both have improved materially.

This segment mix matters because headline GNPA can hide where the remaining risk actually resides.

PNB is now growing loans from a much healthier starting book

Global advances increased 12.7% to approximately ₹12.73 lakh crore.

Growth was stronger in several granular categories:

• Core retail: +17.5%.
• Vehicle loans: +34.4%.
• MSME: +19.8%.
• Agriculture priority-sector advances: +16.4%.

This is a better mix than a PSU bank simply expanding large low-spread corporate loans.

SBI still grows faster from a base four times larger

Advances increased 18.63% to approximately ₹50.47 lakh crore.

This is an extraordinary absolute increase.

SBI added more loans in a year than the entire loan books of many listed banks.

Its growth spans:

• Retail.
• SME.
• Agriculture.
• Corporate.
• International lending.

PNB's network is still enormous enough to matter

PNB reported 10,359 domestic branches and 54,248 total touch points.

Roughly 39% of branches are rural.

This gives the bank meaningful access to:

• Agriculture.
• Government schemes.
• MSME lending.
• Rural deposits.
• Financial inclusion.

The challenge is making each branch more productive.

PNB branch productivity is moving in the right direction

Business per branch rose from approximately ₹257 crore to ₹278 crore.

Business per employee also improved.

This matters because PSU banks historically carried large fixed distribution networks that produced weaker operating leverage than private-bank peers.

If revenue grows faster than the physical network, the old cost disadvantage shrinks.

The digital shift is doing some of that work

PNB digital transactions increased approximately 24% year on year.

PNB One activated users increased 19%.

WhatsApp banking users doubled.

A branch-heavy bank becomes structurally more valuable when transactions migrate online but the physical network remains available for lending, deposits and complex products.

SBI has already moved much further down that path

Almost all routine SBI transactions now occur through alternate channels.

YONO also contributes materially to account opening and digital lending.

The network therefore increasingly functions as:

relationship infrastructure rather than transaction infrastructure.

NIM remains a meaningful SBI advantage

SBI domestic NIM is around 3.00%.

PNB global NIM is 2.50%.

That roughly 50-basis-point difference is substantial.

PNB management is targeting improvement toward approximately 2.6%-2.7% over FY27.

Why is PNB NIM still relatively low?

Part of the answer is asset mix and deposit pricing.

The bank carries:

• Large PSU-style corporate exposures.
• Priority-sector lending.
• Agricultural lending.
• Government-linked balances.
• A large term-deposit base.

These businesses can provide huge scale without necessarily creating wide spreads.

Deposit repricing is PNB's near-term margin catalyst

Management expects lower term-deposit costs to feed more fully into NIM over coming quarters.

That is important because loan yields often reprice faster after rate changes than older fixed deposits.

The temporary mismatch can depress NIM.

As deposits roll over at lower rates, part of the lost spread can return.

SBI faces the same industry mechanics but starts from a better margin

SBI's problem is more about funding quantity than margin quality.

Loans are growing around 18.6%.

Deposits are growing below 10%.

The gap cannot persist indefinitely without increased deposit mobilisation, alternate funding or slower lending.

PNB has far more funding headroom today

Its global credit-deposit ratio is only 73.8%.

That means roughly ₹74 of every ₹100 of deposits is deployed into advances.

SBI's simple advances-to-deposit relationship is materially higher.

PNB therefore has more capacity to grow loans before liabilities become the binding constraint.

That headroom is useful only if PNB can find high-quality credit

A low CD ratio is not automatically a valuation catalyst.

If excess deposits are deployed into:

• Low-yield assets.
• Weak corporate credit.
• Overpriced loans.

ROA may not improve much.

PNB needs profitable deployment, not merely more deployment.

ROA shows the gap between the banks has narrowed dramatically

SBI: 1.11%.

PNB: 1.04%.

The difference is only seven basis points.

This is far smaller than the historical gap investors associate with the two franchises.

But PNB's Q1 ROA also benefits from the normalised tax line

ROA uses net profit in the numerator.

When prior-year tax is distorted, year-on-year ROA improvement can look unusually dramatic.

The absolute 1.04% current ROA is still a real and important milestone.

The 67-basis-point year-on-year jump should be interpreted with the tax base in mind.

The stock-market valuation is where PNB becomes hard to ignore

On August 28, 2026, PNB traded around ₹115.40.

Fresh valuation data placed it around:

• 6.0x trailing earnings.
• About 0.9x book value.

SBI traded around ₹1,046 and roughly:

• 10-11x trailing earnings.
• 1.62x book.

Why might PNB still rerate from below book?

A bank earning sustainable 1%+ ROA and mid-teens ROE does not automatically deserve to trade below tangible book forever.

The rerating case depends on PNB proving that:

• Current NPAs are not merely a cycle low.
• NII growth accelerates beyond 2%.
• NIM moves toward guidance.
• ROA stays above 1%.
• Credit growth remains double digit.
• The tax-normalised earnings base compounds.

The biggest danger is using 6x P/E without normalising earnings

PNB's current P/E benefits from a much stronger trailing profit base after the tax issue rolled through.

The multiple is still genuinely low.

Investors should compare it against sustainable pre-provision operating profit, NII growth and through-cycle credit cost.

A cheap bank with stagnant NII can remain cheap for years.

SBI's 10-11x earnings multiple is more demanding but not extreme

The stock is no longer priced like a distressed PSU bank.

It is increasingly priced as:

• An India credit-growth proxy.
• A financial-services conglomerate.
• A high-ROE bank.
• A beneficiary of corporate capex.

The valuation therefore depends heavily on the current benign credit cycle remaining broadly intact.

SBI has another underappreciated asset: subsidiaries

SBI Life, SBI Mutual Fund, SBI Cards and SBI General add meaningful economic value beyond the standalone bank.

PNB also owns valuable financial interests and subsidiaries.

The scale and market position of SBI's ecosystem is materially greater.

This helps justify part of the group valuation premium.

What should investors watch in SBI?

• Deposit growth versus 18%+ loan growth.
• Domestic NIM around 3%.
• ROA staying above 1%.
• Credit cost remaining controlled.
• Corporate loan pipeline conversion.
• Value creation from subsidiaries.

What should investors watch in PNB?

• NII growth accelerating from 2.1%.
• Global NIM moving toward 2.6%-2.7%.
• ROA sustaining above 1%.
• GNPA moving closer to 2%.
• CASA share stabilising.
• Credit deployment from the low 73.8% CD ratio.

SBI vs PNB FAQs

Which bank is larger?

SBI by a wide margin, with approximately ₹60 lakh crore of deposits versus PNB around ₹17.24 lakh crore.

Which is growing loans faster?

SBI, around 18.6% versus PNB at 12.7%.

Which has the higher NIM?

SBI, with approximately 3.00% domestic NIM versus PNB global NIM of 2.50%.

Did PNB's profit really grow more than 200%?

Reported PAT did, but the year-ago base contained a large one-time tax expense. Core banking earnings grew much more slowly.

Which has better gross asset quality?

SBI, with GNPA of 1.47% versus PNB at 2.78%.

Why is PNB net NPA lower?

PNB has very high provision coverage, reducing the residual net bad-loan exposure after provisions.

Which has higher ROA?

SBI slightly, at 1.11% versus PNB at 1.04%.

Which stock is cheaper?

PNB on both late-August P/E and P/B.

Where can investors check Bull Run data?

Use the SBI stock page, Punjab National Bank stock page and Public Sector Bank sector page.

Research sources

• Bull Run — SBI
• Bull Run — Punjab National Bank
• Bull Run — Public Sector Bank sector research
• SBI official investor presentations
• SBI official Q1 FY2027 earnings-call materials
• PNB official Q1 FY2027 financials, presentation and press release