CRISIL reaffirms 'CRISIL AA/Negative' rating on long-term instruments of Punjab -; Sind Bank

29 Aug 2022 , 03:08 PM

Punjab and Sind Bank Limited informed that the rating agency CRISIL Ratings reaffirmed its rating on the long-term debt instruments at ‘CRISIL AA/Negative’.

CRISIL Ratings has also withdrawn its rating on Rs200 crore of Lower Tier II bonds in accordance with its withdrawal policy.

CRISIL received an independent confirmation that these securities have been completely redeemed.

The rating is based on the anticipation of significant support from the primary owner, the Government of India (GoI). These advantages are compensated in part by the bank’s poor asset quality and low profitability.

The debt instruments’ ‘Negative’ outlook indicates the bank’s poor asset quality and profitability, particularly in regard to the rating category.

The bank’s gross non-performing assets (NPAs) improved in fiscal 2022 and stood at 12.2% as of March 31, 2022. In addition, for fiscal 2022, the bank declared a profit of Rs1,039 crore with a return on assets (RoA) of 0.9%.

However, progress has been slower than anticipated. Nonetheless, gross NPAs improved further in the first quarter of fiscal 2022, to 11.3%, with a profit after tax of Rs205 crore, stated CRISIL Ratings in its rationale.

At around 3.11 PM, Punjab & Sind Bank was trading at Rs15.45 down by 1.09% from its previous closing of Rs15.62 on the BSE. The scrip touched intraday high and low of Rs15.90 and Rs14.81 respectively.

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