Punjab National Bank announced that Brickwork Ratings reaffirmed the ratings of 'BWR AA+' for Innovative Perpetual Debt Instrument amounting to Rs.200 crore, withdrawn (on redemption) the rating of Innovative Perpetual Debt Instrument of Rs.500 crore and reaffirmed the ratings of 'BWR AA' for Basel III Additional Tier I bonds amounting to Rs.5250 crore of Punjab National Bank. The Rating is placed on Credit Watch with Developing Implications.
The reaffirmation continues to factor in the Government of India (GOI)'s support with equity stake of 75.41%, improved earnings and visibility of net profits as of June 30, 2019, The Government of India (GOI) in August 2019 announced proposed amalgamation of 10 Public Sector Bank (PSBs) to form 4 PSBs wherein Oriental Bank of Commerce and United Bank of India is proposed to be amalgamated with Punjab National Bank.
The Boards of the respective Banks have accorded their in-principle approval for the proposed amalgamation during September 2019. Brickwork Ratings has taken note and placed the ratings of bonds of these banks on Credit Watch with Developing Implications.
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