Punjab National Bank plans Rs 1,000 cr AT-1 bond issue to shore up capital

Public sector lender Punjab National Bank (PNB) plans to raise up to Rs 1,000 crore in capital through additional tier-1 (AT1) bonds. The proposed offering comes just after it raised Rs 4,000 crore through tier-II bonds in early December.

Managing director (MD) and chief executive officer (CEO) A Goel said while capital adequacy is above regulatory norms, the bank would like to maintain an adequate capital pool to support credit growth. 

The cost of paying coupon on tier-1 bonds, a form of debt, is less than servicing equity capital.

The Delhi-based lender’s capital adequacy ratio (CAR) stood at 14.74 per