ICRA reaffirms key PNB ratings, withdraws others

ICRA Limited, in its rating action dated December 5, 2025, has reaffirmed key credit ratings for Punjab National Bank while withdrawing others for matured instruments. The Basel III Tier I bonds are reaffirmed at [ICRA]AA+/Stable, and Infrastructure Bonds and Fixed Deposits are reaffirmed at [ICRA]AAA/Stable. Certificates of Deposit maintain an [ICRA]A1+ (Reaffirmed) rating.

Ratings for specific Infrastructure Bonds (INR 1,800.00 crore) and Basel III Tier II Bonds (INR 1,000.00 crore) were withdrawn, reflecting their full redemption. ICRA highlights PNB's comfortable capitalisation, strong deposit franchise, and sovereign ownership as key strengths, with the Government of India holding a 70.08% equity stake. Asset quality also improved, with Gross NPAs declining to 3.45% as of September 30, 2025, from 4.48% a year prior.

The bank's liquidity remains strong, evidenced by a 142% liquidity coverage ratio and positive cumulative mismatches in the up to 1-year maturity bucket. While operating profit declined to 1.36% of average total assets in FY2025, ICRA expects profitability to remain healthy. Negative rating triggers would include a decline in RoA below 0.3% or capital cushions falling below 100 bps on a sustained basis.