Why did PNB’s share price rise to a multi-year high today? | Popgen Tech


Shares of state-owned Punjab National Bank (PNB) rose more than 6% to 55 each on the BSE in Friday’s trading session, trading around its highest level since February 2020, after the lender on Thursday said it had received government approval to divest the stake its entire holding in UTI Asset Management Company Limited as part of its non-core assets. sale plan to strengthen its capital base.

“The Exchange is hereby informed that the Bank has received the approval of DIPAM, Ministry of Finance, Government of India for the divestment of all/part of the Bank’s stake in UTI Asset Management Company Limited in single or multiple tranches subject to compliance with SEBI Regulations/other applicable regulatory guidelines,” the PSU bank said in an exchange filing.

The bank, which has a 15.22% stake in UTI AMC, will divest its entire stake in the mutual fund company in single or multiple tranches for realizing returns on investment. The current assessment is 1,329 crore.

The PNB in ​​a separate file informed that the credit rating agency ‘CARE Ratings’ through its rating action reviewed the outlook for the AT-1 Bonds, Tier II and Infrastructure Bonds of the Bank from ‘Stable’ to ‘Positive’.

“The ratings continue to gain strength from the franchise’s strong and established presence through its pan-India branch network, which helps it garner a low-cost and stable current account savings account deposit base, ” said the rating agency.

The ratings are also a factor in improving the bank’s advances and comfortable capitalization levels, which improve its ability to absorb asset quality pressures as well as support near-term growth, post-equity infusion through QIP in FY22 and internal accruals due to improved profitability in FY22, though profitability continued to remain muted. The ratings, however, remain constrained by the moderate but improving asset quality parameters, it added.

Improvement in asset quality parameters with gross non-performing assets falling below 8.5% or net non-performing assets below 3% on a sustained basis; improvement in capitalization levels with a significant cushion on the regulatory requirement; continued improvement in profitability and capitalization while improving its asset quality parameters on a sustained basis could be positive factors that could lead to a positive rating action/upgrade, Care Ratings said.

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