Shares of Punjab National Bank slumped to 1-month lows
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Shares of Punjab National Bank, India's 2nd largest PSU lender, slumped to 1-month lows on Tuesday after international ratings agency Fitch downgraded the bank's viability rating.Fitch said it was cutting PNB's viability rating by a notch to `BB' to reflect the growing risk to the bank's
Fitch said PNB's non-performing assets have risen faster than its capital replenishment and the agency believes that PNB's capital may not grow at the faster pace even though it will receive government's support via infusion of fresh capital in this fiscal year.
As a consequence, PNB fell 7.25 rupees, or 5 percent, to 138.25 rupees on the National Stock Exchange, hitting its lowest level since July 29. Nearly 40 lakh shares of PNB were traded on the NSE compared with the 5-day average of 50.2 lakhs. Its Open Interest is up 9.6 percent.
Earlier, in July PNB said its net non--performing assets, a key measure, for the first quarter stood at 4.05 percent compared with 4.06 percent in the previous three months. Its Gross Non performing assets over the same periods fell to 6.47 percent versus 6.55 percent.
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PNB's first quarter net profit fell to 721 crore rupees compared with 1,405 crore rupees in the year ago period. Net Interest Income during April-June slipped to 4,102 crores versus 4,380 crore rupees.
PNB's market capitalisation has shrunk 29 percent to 26,000 crore rupees in the past one year as investors exited banks that have a direct exposure to the industrial slowdown. The stock is trading at 0.6 times is book value of 207 rupees.
Meanwhile, Fitch affirmed it ratings on nine other banks.
Image credit: Indiatimes
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