ICRA upgrades tier I, II bonds of Canara Bank and Punjab National Bank

Rating agency ICRA has upgraded tier I and tier II bonds of Punjab National Bank (PNB) and Canara Bank due to improvements in their capital position and profitability. Both banks have also stated that their solvency profile improved. 

The solvency is expected to get a further boost from expectations of steady internal capital accruals, the rating agency said in a statement. Canara Bank's additional tier I bonds were upgraded from AA to AA+, while its tier II bonds were upgraded from AA+ to AAA. In the instance of PNB, the tier II bond’s rating was upgraded from AA to AA+. 

While PNB and Canara Bank are adequately capitalised and likely to remain self-sufficient for their capital requirements, ICRA expects the government of India to continue to provide support if required. While PNB had a capital adequacy ratio of 15.2 per cent in September 2021, it was 14.37 per cent for Canara Bank.