PNB falls as Fitch downgrades

Punjab National Bank (PNB) is down in the red today morning. Opening marginally lower at Rs.143, the stock went down to an intra day low of Rs.139.50 and is now around the same low levels. This is a 3% drop over yesterday’s  close.

The counter of PNB donned the colour red after rating agency, Fitch downgraded PNB's Viability Rating (VR) by one notch to 'bb' to reflect the growing risk to the bank's capital position from its mounting stock of stressed assets, which has risen at a faster rate than its capital replenishment.

Fitch’s downgrade reflects its expectation that capital buffers are unlikely to improve significantly even though the state is likely to inject capital into the bank in current FY16 fiscal. Fitch believes that the bank's recovery could prove to be more protracted than other similar-sized peers because of these stressed assets.