PNB expects Rs 1500 crore treasury income in Third Quarter

State-owned Punjab National Bank (PNB) expects around Rs 1,500 crore in treasury income during the third quarter, along with an improvement in margins. During the first two quarters, the bank recorded treasury income of Rs 1,800 crore and anticipates Rs 1,500 crore in the ongoing quarter, said PNB MD & CEO Ashok Chandra.

What is Treasury Income?

Treasury income is the earnings a bank generates from its investments, trading, and money market operations, rather than from its regular lending activities. This includes interest from government securities and bonds, profits from buying and selling money market instruments such as Treasury bills or commercial papers, gains from foreign exchange transactions, and income from derivatives and other financial instruments.

Treasury income is important because it contributes to a bank’s overall profits, helps manage liquidity, and reduces dependence on interest income from loans, which can fluctuate with market conditions. For example, if a bank invests Rs 1,000 crore in government bonds at 6% interest, the Rs 60 crore earned from this investment would be part of its treasury income.

What he said about Margins

On margins, he stated that repricing of deposits has already begun, and the Net Interest Margin (NIM) is expected to improve in the second half of the financial year. On a conservative basis, the bank expects a 5 basis points improvement in NIM in Q3 and a 10 basis points increase in Q4. For FY26, PNB has guided for a NIM of 2.8–2.9%.