Punjab National Bank (PNB) fell 2.09% to Rs 63.35 after the public sector lender said CRISIL had put its bonds on "rating watch with developing implications".
PNB in an exchange filing during market hours today, 18 December 2019, reported that the credit rating agency CRISIL has placed ratings on "Rating Watch with Developing Implications" from "stable" outlook.
CRISIL stated that the revision was on account of the announcements made by the Ministry of Finance (MoF) GoI, with respect to the proposed amalgamation of public sector banks as there has been significant progress on the amalgamation including approvals from the Boards of the banks. CRISIL will resolve the rating watch once clarity emerges, post-merger completion, on the merged entity's business and financial profile. CRISIL will monitor for potential integration challenges and any impact on the earnings profile of the merged entity. The asset quality of the merged entity will also be a monitorable. However, on resolution of the rating watch, the rating on the debt instruments of the merged entity is unlikely to move by more than one notch.
On 14 December 2019, PNB disclosed that the Reserve Bank of India (RBI) has found that the bank under-reported bad loans by Rs 2,617 crore in the year ended 31 March 2019. The adjusted (notional) net loss for the year ended 31 March 2019, after taking into account the divergence in provisioning, was at Rs 11,335.90 crore. Earlier, PNB had reported a net loss of Rs 9975.49 crore in the year ended March 2019. The bank had reported Rs 30,037.66 crore net NPAs during the year while the RBI assessed it at Rs 32,654.66, leaving a gap of Rs 2,617 crore. The divergence in provisioning also increased by Rs 2091 crore for the fiscal ended March 2019.
PNB reported a net profit of Rs 507.05 crore in Q2 September 2019 compared with a net loss of Rs 4,532.35 crore in Q2 September 2018. Total income rose 10.83% to Rs 15,556.61 crore in Q2 September 2019 over Q2 September 2018.
The stock continues to trade below its 200 days simple moving average placed at 73.36, which will act as a resistance in near term.
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PNB is a public sector bank. The Government of India holds 75.41% stake in the bank as on 30 September 2019.
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