Fitch Affirms Punjab National Bank at 'BBB-'; Outlook Negative

Mumbai: Fitch Ratings has affirmed Punjab National Bank's (PNB) Long?Term Issuer Default Rating (IDR) at 'BBB?'. The Outlook is Negative. This reflects the Outlook on India's sovereign rating (BBB?/Negative). The agency has also affirmed PNB's Viability Rating (VR) at 'b'. In line with the updated Bank Rating Criteria, we have assigned PNB a Government Support Rating (GSR) of 'BBB-', which drives the IDR.

The operating environment (OE) outlook of Indian banks has been revised to stable from negative, reflecting a better recovery than we expected in business and economic activity following the Covid-19 pandemic second wave. The 'bb' OE score is higher than the implied score of 'b', reflecting our view that India's economy will generate sustainable business growth opportunities.

Economic momentum and regulatory measures should support modest improvements in Indian banks' financial profiles over the next 12-24 months, even though challenges remain.

Fitch is withdrawing PNB's Support Rating and Support Rating Floor as they are no longer relevant to the agency's coverage following the publication of our updated Bank Rating Criteria on 12 November 2021.