Ind-Ra updates on ratings of PNB

India Ratings (Ind-Ra) has vide its rating action 13.10.2021 has assigned 'IND AAA/Stable' rating to Rs. 2,000 Crore Tier 2 Bonds (under Basel III) of Punjab National Bank (PNB) while affirming its Long-Term Issuer Rating at 'IND AAA/ Stable', Short-Term Issuer Rating at 'IND A1+' and ratings on existing Basel III Tier 2 Bonds, & Senior Infrastructure Bonds at 'IND AAA/Stable' and Additional Tier 1 Bonds at 'IND AA/Stable'.

The ratings continue to reflect PNB's high systemic importance, and hence, the high probability of support from the government of India (GoI; 73.15% stake as of June 2021), if required.

The ratings reflect PNB's high systemic importance, large franchise with a pan-India presence, healthy capitalisation, adequate and stable funding base and liquidity, and its provision coverage ratio being lower than the peer group. While slippages for PNB remained elevated in FY21, it declined on a yoy basis during the year; nevertheless, it would remain a key monitorable over the near term.

The AT1 bonds' rating reflects the bank's strong standalone credit profile, along with its ability to service coupons and manage the principal write-down risk on its debt capital instruments. To arrive at the rating, Ind-Ra has considered the discretionary component; coupon omission risk; and the write-down/conversion risk as key parameters. The agency recognises the unique going-concern loss absorption features that these bonds carry and differentiates them from the bank's senior debt, factoring in a higher probability of an ultimate loss for investors in these bonds. Ind-Ra envisages coupon deferrals and principal write-down risk as a remote possibility in view of the bank's adequate revenue reserve buffers.

Shares of Punjab National Bank was last trading in BSE at Rs. 42.55 as compared to the previous close of Rs. 41.45. The total number of shares traded during the day was 5946862 in over 9565 trades.

The stock hit an intraday high of Rs. 42.75 and intraday low of 41.70. The net turnover during the day was Rs. 251623687.00.

Source : Equity Bulls

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PunjabNationalBank INE160A01022 PNB Banks RatingUpdate