You are here: Home » Markets » News
Business Standard

Nifty PSU Bank at 2-month high; PNB hits 6-month high on rating upgrades

PNB, the top gainer among PSU banks, was trading 3% higher at Rs 87.25, at its highest level since September 3, 2018 on the NSE.

SI Reporter  |  Mumbai 

Punjab National bank

Shares of public sector undertaking (PSU) banks were continued their northward journey with Nifty PSU Bank index hitting two-month high on expectation of improve financial performance.

At 11:15 am, Nifty PSU Bank index, the largest gainer among sectoral indices, was up 2.2 per cent, as compared to a 0.64 per cent gain in the benchmark Nifty50 index. Nifty Bank and Nifty Private Bank indices were up 1 per cent each.

State Bank of India (SBI), Punjab National Bank (PNB), Oriental Bank of Commerce, Canara Bank, and Bank of Baroda were up in the range of 2 to 3 per cent on the National Stock Exchange (NSE).

PNB was the top gainer among PSU banks, hitting six month high of Rs 87.25, up 3 per cent on the NSE. The stock of state-owned bank was trading at its highest level since September 3, 2018. In past one month, PNB has rallied 24 per cent against 6 per cent rise in the Nifty 50 index.

The rating agency ICRA upgraded the outlook on all the long-term ratings and the medium-term rating has been revised to ‘Stable’ from ‘Negative’.

The stable outlook factors in ICRA’s expectations of reduced asset quality pressure, improving solvency levels and expectations of improved earnings indicators in FY2020. The outlook will be revised to positive if the bank is able to demonstrate an improvement in the asset quality, capitalisation and solvency levels, as per ICRA’s estimates, by limiting fresh slippages.

The revision in the outlook factors in the sizeable capital infusion of Rs 14,156 crore by the Government of India (GoI) in FY2019 as a part of its recapitalisation programme for public sector banks (PSBs), the rating agency said in the rating action.

Besides, PNB, ICRA upgraded the outlook of the long-term ratings of Punjab & Sindh Bank, Bank of Maharashtra, Oriental Bank of Commerce (OBC) and Bank of India (BOI) to ‘Stable’ from ‘Negative’.

Last week, Moody’s Investors Service upgraded the ratings of Central Bank of India (CBI) and Indian Overseas Bank (IOB) and affirmed ratings for BOI, Canara Bank, OBC and Union Bank of India.

Moody's has changed the outlook for CBI and IOB to stable from positive. For BOI, Canara, OBC and Union Bank. It has maintained the outlook at stable. The capital infusion from the government is the key driver for the rating action. The rating action also factors in the improvement in the six banks' asset quality, Moody’s said in a statement.

First Published: Fri, March 15 2019. 11:36 IST
RECOMMENDED FOR YOU