Punjab National Bank has been added to the BSE Bankex index as part of today's index rejig, scheduled to take effect at 3pm. The inclusion involves an addition of USD 15.00 million, marking a notable development for the public sector banking major.

Index Inclusion Details

The BSE Bankex rejig today brings Punjab National Bank into the banking index, which tracks the performance of leading banking stocks on the Bombay Stock Exchange. The timing of the inclusion is set for 3pm today, following the standard protocol for index changes.

Market Implications

The addition to BSE Bankex represents recognition of Punjab National Bank's market standing within the banking sector. Index inclusions typically generate interest from institutional investors and index funds that track the respective indices, potentially influencing trading patterns.

About the Development

This index rejig positions Punjab National Bank among the constituents of BSE Bankex, which serves as a benchmark for banking sector performance. The USD 15.00 million figure associated with this inclusion reflects the scale of the adjustment in the index composition.

Punjab National Bank has received a rating reaffirmation from Brickwork Ratings for its Basel III Additional Tier 1 Bonds, maintaining the BWR AA-/Stable rating. The rating action covers bonds totaling ₹3,000 crores.

Rating Details and Rationale

Brickwork Ratings reaffirmed the long-term ratings based on PNB's consistent improvement in asset quality metrics and reduction in fresh slippages over recent years. The rating continues to factor in the majority ownership and expected support from the Government of India, considering the bank's systemic importance as the third-largest public sector bank by total business.

Asset Quality Improvements

Punjab National Bank demonstrated significant improvement in asset quality metrics. Gross NPAs declined substantially, supported by enhanced recoveries, upgradation, and decline in fresh slippages.

Financial Performance and Capitalization

The bank maintained comfortable capitalization ratios, well above minimum regulatory requirements. PNB raised core capital of ₹5,000 crores through qualified institutional placement, resulting in improved capital support for growth.

Business Growth and Market Position

Punjab National Bank's global business comprising deposits and advances reached ₹27.87 lakh crores, reflecting growth of 11.11% on a year-on-year basis. The bank's deposit base grew by 10.90% YoY to ₹16.17 lakh crores, with term deposits increasing by 14.70% YoY to ₹10.33 lakh crores.

Government Support and Market Presence

The rating reflects strong sovereign support with the Government of India holding a 70.08% stake. PNB operates through an extensive network of 10,228 domestic branches, 2 overseas branches, and 11,187 ATMs across the country. The bank maintains its position as the third-largest public sector bank in India by business size following the amalgamation with Oriental Bank of Commerce and United Bank of India in April 2020.