ICRA has reaffirmed Punjab National Bank’s (PNB) ratings and withdrawn ratings for matured instruments following their rating action on December 5, 2025. The ratings reaffirmation reflects PNB’s sovereign ownership, robust deposit franchise, and strong liquidity profile. ICRA withdrew ratings for ₹1,000 crore Basel III Tier II bonds and ₹1,800 crore infrastructure bonds, as these have been fully redeemed. The outlook on the ratings remains stable.
ICRA Rating Action
On December 5, 2025, ICRA took rating actions on Punjab National Bank’s (PNB) debt instruments, reaffirming existing ratings and withdrawing ratings for instruments that have matured.
Ratings Reaffirmed
ICRA has reaffirmed the following ratings:
- Basel III Tier I Bonds: [ICRA]AA+/Stable
- Infrastructure Bonds: [ICRA]AAA/Stable
- Certificates of Deposit: [ICRA]A1+
- Fixed Deposits: [ICRA]AAA/Stable
Ratings Withdrawn
ICRA has withdrawn the ratings for the following instruments, as they have been fully redeemed:
- Infrastructure Bonds: [ICRA]AAA (Stable) for ₹1,800 crore
- Basel III Tier II Bonds: [ICRA]AAA (Stable) for ₹1,000 crore
Rationale for Reaffirmation
The reaffirmation of ratings reflects several key factors:
- PNB’s sovereign ownership.
- Robust deposit franchise, resulting in a high share of retail deposits.
- Strong liquidity profile.
- Comfortable capitalization profile, supported by steady internal accruals and a recent qualified institutional placement (QIP) in FY2025.
Asset Quality and Profitability
PNB continues to show improvement in headline asset quality indicators, driven by a moderation in fresh non-performing advances (NPA) generation rate. Provision coverage ratio (excluding write-offs) stands at 90%. ICRA expects PNB to maintain healthy internal capital generation in the near-to-medium term.
Key Monitorable Factors
ICRA will continue to monitor the performance of the vulnerable book, comprising restructured advances and overdue accounts. The impact of the transition to the expected credit loss (ECL) framework on capital and profitability will also be a key monitorable.
Liquidity and Funding
PNB’s liquidity profile remains strong, supported by positive cumulative mismatches in the up to 1-year maturity bucket and a high share of core deposits. The liquidity coverage ratio remained strong at 142%.
Source: BSE