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.

Punjab National Bank (PNB) has received rating reaffirmation from India Ratings and Research Pvt. Ltd., which maintained the bank's INDAAA/Stable ratings across various debt instruments. This rating action, dated December 11, 2025, underscores PNB's robust financial position, strong government support, and improving operational metrics.

Rating Reaffirmation Details

India Ratings has affirmed PNB's ratings across multiple instrument categories:

Strong Capital Position

PNB maintains a well-capitalized position with comfortable capital buffers above regulatory requirements:

The bank has demonstrated significant improvement in internal accruals, with management targeting to exceed 1.00% ROA in the medium term. PNB's capital raising ability was further demonstrated through three qualified institutional placements totaling ₹105.90 billion across FY21, FY22, and September 2024.

Asset Quality Improvement

PNB has shown consistent improvement in asset quality metrics:

The bank maintains almost 100.00% provisions against its exposures to NCLT-1 and NCLT-2 lists, demonstrating prudent risk management practices.

Operational Performance

PNB's operational metrics reflect stability and growth:

The bank's deposit franchise remains stable with CASA ratio at 36.10% in Q2 FY26, maintaining its position as the second-largest PSB in terms of deposit market share.

Systemic Importance and Government Support

India Ratings factors in PNB's systemically important position and likelihood of continuous financial support from the Government of India, which holds a 70.08% stake. The bank maintains significant market presence with 6.90% market share in total deposits and 5.90% in gross advances on an amalgamated basis.

PNB operates through an extensive network of 10,228 domestic branches, two international branches, 11,187 ATMs, and 32,278 business correspondents, reinforcing its pan-India franchise.

Outlook and Key Monitorables

The stable outlook reflects expectations of continued steady growth in advances and deposits while maintaining healthy profitability. Key areas for monitoring include the bank's ability to enhance retail exposure, improve low-cost CASA franchise, and prepare for Expected Credit Loss (ECL) provisions implementation.

With superior liquidity position including a liquidity coverage ratio of 132.73% and 23.20% of total assets in RBI balances and government securities, PNB remains well-positioned to meet funding requirements and support future growth initiatives.