Moody's Ratings has affirmed Punjab National Bank's (PNB) Baa3 long-term local and foreign currency bank deposit ratings.
The ratings reflect PNB's stable operating environment, standalone credit metrics, and a very high level of expected government support.
The outlook on the ratings remains stable.
PNB's asset quality has improved due to a reduction in problem loans and increased loan loss coverage; stable asset quality and profitability are expected over the next 12-18 months.
Funding and liquidity profiles remain key credit strengths, supported by its PSB status and branch network.
PNB's gross NPL ratio declined to 3.9% as of March 2025 from 5.7% in March 2024.
The bank's loan-loss coverage on problem loans has strengthened to 96.8%.
Net income to tangible assets improved to 0.9% in fiscal 2025.
Moody's has assigned a Moderate+ macro profile to PNB, reflecting India's economic conditions.
PNB's Common Equity Tier 1 (CET1) capital ratio improved to 12.3% as of March 2025.
Moody's notes that an upgrade of PNB’s Baa3 deposit ratings is unlikely because they are at the same level as India’s Baa3 sovereign rating.