PNB reported PPoP of INR42.4b (+29.5%/52.7% QoQ/YoY; in-line), supported by higher-than-expected other income (11% beat, even after considering PNBHF stake sale gains) and lower-than-expected opex due to controlled employee expense. Provisions of INR44.7b (35% higher) led to PBT loss of INR2.2b. Slippages moderated to INR31.7b (2.8% annualized), but strong loan growth enabled 121bp/89bp QoQ improvement in the GNPL/NNPL ratios. Coverage ratio stood largely unchanged at 40.8%. PNB needs to make total additional provisions of INR10.58b toward NCLT in 4QFY18. Stressed assets stood at INR671.3b (14.1% of advances) v/s INR728.5b as on 3QFY17. Domestic NIM for 9MFY18 shrunk 17bp YoY to 2.59%, with a 30bp decline in cost of funds and a 42bp decline in yield on advances YoY. Loan book grew 10%/17% QoQ/YoY, driven by retail, agri and MSME loans. Retail loans grew 5%/22% QQ/YoY, driven by 22% YoY growth in housing loans.