New Delhi: State-owned Punjab National Bank (PNB) said in a regulatory filing on Wednesday that the India Ratings and Research assigned 'IND AAA/Stable' rating to Basel III Tier II Bonds worth Rs 40 billion of the bank. Further, the filing also noted that the rating agency has affirmed the existing ratings of other debt instruments.
The rating agency affirmed IND AAA/Stable rating for the long-term issuer rating, 'IND AA+/Stable' rating to AT1 bonds worth Rs 117.95 billion, 'IND AAA/Stable' rating for fixed deposits, 'IND AAA/Stable' to Basel III Tier 2 bonds worth Rs 170 billion, 'IND AAA/Stable' rating to senior infrastructure bonds worth Rs 20 billion and 'IND A1+' rating to Certificates of deposit (CDs) worth Rs 600 billion. Sharing the details for CDs, the filing also noted that the maturity period for them is 1-365 days.
Credit rating agency India Ratings and Research has provided an assessment of Punjab National Bank (PNB), highlighting several key rating drivers. PNB's systemic importance has increased following its amalgamation, making it the second-largest public sector bank in terms of deposit market share and third-largest in terms of net advances market share. The bank's capital buffers are considered adequate, although weak internal accruals may dampen growth prospects. PNB possesses a strong low-cost liability franchise and maintains superior liquidity indicators. However, profitability has been under pressure, with the bank reporting lower profits in FY23 due to higher operating expenses and provisioning requirements. Asset quality challenges persist, although PNB has been increasing its provision coverage ratio. The ESG factors have minimal credit impact on PNB's rating. Overall, the agency notes PNB's market position and support from the government as positive factors.
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