Mumbai (Maharashtra) [India], September 2 (ANI): Crisil has removed its rating on the long-term debt instruments of Punjab National Bank (PNB) from rating watch with developing implications and reaffirmed it at AA-plus and AA-minus.
The outlook assigned on the rating is stable. Crisil has assigned AA-plus stable ratings to Rs 1,500 crore tier two bonds (under Basel III), Rs 300 crore perpetual tier one bonds and Rs 200 crore lower tier two bonds (under Basel II) respectively.
They are transferred from United Bank of India (UBI) and A1-plus to the certificate of deposit of Rs 35,000 crore which was transferred from Oriental Bank of Commerce (OBC) post amalgamation of these banks with PNB.
Crisil has also withdrawn its rating on upper-tier two bonds worth Rs 500 crore and tier-one perpetual bonds worth Rs 2,520.5 crore.
The agency had placed the ratings on the PNB's long-term debt instruments on watch with developing implications on December 17 last year, given the significant progress in the amalgamation of UBI and OBC with PNB and pending clarity on the business and financial risk profiles of the combined entity.
"The watch resolution follows the completion of the amalgamation process effective April 1, availability of merged bank's financials and consequent greater clarity on the credit risk profile of the merged PNB," said Crisil.
With the completion of the merger, PNB is now the second-largest public sector bank in India and enjoys a strong market position at 6.8 per cent of overall banking system advances.
Crisil said the outstanding ratings on debt instruments of PNB continue to factor in the expectation of strong support from the government, established market position and the bank's healthy resource profile. The ratings also factor in the modest asset quality and profitability metrics. (ANI)