PNB's Q2FY16 results were below estimates as the earnings grew by 7.9% YoY (-13.8% QoQ) to Rs 6.2 bn led by weak NII growth (-6.3% YoY) and lower non- interest income. NIMs improved by 7 bps QoQ to 2.97%. The only silver lining in the result came in asset quality which improved marginally. GNPA and NNPA declined to 6.36% and 3.99% vs 6.47% and 4.05% respectively in Q1FY16.