Shares of Punjab National Bank (PNB) jumped over 3 per cent in intraday trade on the Bombay Stock Exchange (BSE) on Thursday after global rating agency Moody’s upgraded the outlook on the lender to ‘positive’ from ‘stable’.
In contrast, the S&P BSE Bankex index was trading 259.18 points, or 0.85 per cent, lower at 30,257.45 after Reseve Bank of India (RBI) made it mandatory for banks to link lending rate to external benchmark. ICICI Bank, Federal Bank, Kotak Mahindra Bank, State Bank of India and IndusInd Bank were among top losers, falling between 1-2 per cent.
Global rating agency Moody’s Investors Service on Wednesday upgraded the outlook on PNB after the government announced the merger of Oriental Bank of Commerce (OBC) and United Bank of India with the bank.
The agency has affirmed the local and foreign currency deposit ratings of PNB at Ba1/NP, while Baseline Credit Assessments (BCA) and adjusted BCA were affirmed at b1.
Post-merger, PNB will become the second-largest public sector bank in India with a deposit market share of 8 per cent, compared to its standalone market share of 5.2 per cent as of March 2019. The agency expects the bank’s asset quality and profitability to remain broadly unchanged following the merger.
Continuing its gaining streak for the second stright session, PNB share price gained as much as 3.42 per cent to hit a day’s high of Rs 61.95 after opening higher at Rs 61.80 on the BSE. At the time of reporting, the scrip was trading at Rs 61, up 1.84 per cent.
In a similar trend, stock of PNB was trading 2.17 per cent higher at Rs 61.20 on the National Stock Exchange (NSE) against previous close level of Rs 59.90.
The state-run bank, in its board meeting today, also approved capital infusion of up to Rs 18,000 crore by the government through preferential issue of equity shares. The PNB board also gave its “in-principle approval” for the amalgamation of the OBC and United Bank with itself, as announced by the government on Friday.
Meanwhile, the benchmark indices were trading lower with the BSE Sensex down by 114 points at 36,611, while the Nifty fell 15 points to quote at 10,829 level.