PNB positively surprised with lower gross stressed asset additions of Rs 40.6bn (4.1% ann. vs. 4.9/15.7% YoY/QoQ). Further, higher recoveries & upgrades (Rs 23bn) coupled with controlled slippages (Rs 34bn, 3.6% ann. vs. 7.7% QoQ) led to stable asset quality. PCR (59.3%) too improved sequentially.