PNB Shares Rise Over 3% After Moody’s Upgrade
On August 30, Finance Minister Nirmala Sitharaman announced that PNB will be merged with Oriental Bank of Commerce (OBC) United Bank.
Punjab National Bank (PNB) shares rose over 3 per cent on Thursday, a day after rating agency Moody’s Investors Service upgraded the outlook on lender to ‘positive’ from ‘stable’. Moody’s has also affirmed the local and foreign currency deposit ratings of PNB at “Ba1/NP”. The affirmation of PNB’s ratings with a positive outlook reflects Moody’s view that bank’s consumer account or BCA will likely improve after the capital infusion from the government, and that its financial metrics will gradually improve. Earlier this week, the bank said that its board would consider capital infusion of up to Rs. 18,000 crore on its board meeting on Thursday.
On August 30, Finance Minister Nirmala Sitharaman announced that PNB will be merged with Oriental Bank of Commerce (OBC) and United Bank. Post-merger, PNB will become the second largest public sector bank in India with a deposit market share of 8 per cent, compared to its standalone market share of 5.2 per cent as of March 2019, according to Moody’s. Moody’s expects the bank’s asset quality and profitability will remain broadly unchanged following the merger. However, the bank’s enlarged market share will benefit its deposit franchise and help improve its funding.
On the Bombay Stock Exchange (BSE), PNB rose as much as 3.42 per cent to an intraday high of Rs. 61.95 apiece. On the National Stock Exchange (NSE), PNB shares opened higher at Rs. 61.90 apiece and advanced to as much as Rs. 61.90 apiece, marking an increase of 3.33 per cent.
At 10:29 am, PNB shares traded 2.59 per cent higher at Rs. 61.45 apiece on the BSE outperforming the Sensex which was 0.43 per cent.
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