CRISIL reaffirms rating of Punjab and Sind Bank

CRISIL Ratings has reaffirmed its rating on the long-term debt instruments of Punjab & Sind Bank (P&SB) at 'CRISIL AA/Negative'.

CRISIL Ratings has also withdrawn its rating on Lower Tier II bonds aggregating to Rs 200 crore (See Annexure 'Details of Rating Withdrawn') in-line with its withdrawal policy. CRISIL Ratings has received independent confirmation that these instruments are fully redeemed.

The rating continues to factor in expectation of strong support from majority owner, the Government of India (GoI). These strengths are partially offset by the bank's weak asset quality and modest earnings.

The 'Negative' outlook on the debt instruments reflects bank's weak asset quality and profitability, especially in relation to the rating category. Gross non-performing assets (NPAs) of the bank improved in fiscal 2022 and stood at 12.2% as on March 31, 2022. Also, the bank reported a profit of Rs 1039 crore for fiscal 2022 with a return on assets (RoA) of 0.9%. However, the pace of improvement remains slower than expected. Nevertheless, the first quarter of fiscal 2022 saw further improvement in gross NPAs at 11.3% and a profit after tax of Rs 205 crore.

Under the RBI August 2020 and May 2021 resolution framework for Covid-19-related stress, the bank implemented restructuring on around 3.7% of gross advances as on June 30, 2022. This is over and above around 0.6% of advances restructured under the MSME scheme. The performance of the restructured portfolio and the ability of the bank to manage collections and asset quality will remain a key monitorable.

Shares of Punjab & Sind Bank was last trading in BSE at Rs. 15.62 as compared to the previous close of Rs. 15.60. The total number of shares traded during the day was 62555 in over 377 trades.

The stock hit an intraday high of Rs. 16.20 and intraday low of 15.51. The net turnover during the day was Rs. 989196.00.

Source : Equity Bulls

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PunjabandSindBank INE608A01012 PSB RatingUpdate