PNB board’s nod to raise up to Rs 12K cr via bonds

The Board of Punjab National Bank (PNB) on Wednesday approved raising up to Rs 12,000 crore in debt, in one or more tranches, as per an exchange filing by the bank.

Of the total Rs 12,000 crore, Rs 7,000 crore will be raised via issuance of additional tier-I bonds, and Rs 5,000 crore via Basel III-complaint tier-II bonds, as per the notice.

The bank had last week successfully raised Rs 974 crore through additional tier-I bonds at an 8.75% coupon rate. It was the first major issue of AT-I bonds by a large bank in India after the crisis at Credit Suisse raised concerns on the risk associated with such instruments.

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Including PNB’s last fundraise, so far in FY23, Indian banks have raised Rs 34,394 crore via AT-1 bonds. As of December-end, the bank’s capital adequacy ratio stood at 15.15%, of which common equity tier-I ratio constituted 10.84%, AT-1 ratio formed 1.37% and tier-II ratio was at 2.94%.

Shares of the bank ended 2.9% up at Rs 46.21 apiece on the BSE on Wednesday.