PSU banks stocks are trading mixed in the afternoon trade on Thursday, with shares of Punjab National Bank leading the pack after global rating agency Moody's Investor Service upgraded its outlook.
PSU banks stocks are trading mixed in the afternoon trade on Thursday, with shares of Punjab National Bank leading the pack after global rating agency Moody’s Investor Service upgraded its outlook. PNB shares gained more than 4% to hit the day’s high at Rs 61.95 on BSE. Moody’s upgraded the outlook on Punjab National Bank (PNB) to ‘positive’ from ‘stable’ after the government announced its merger of Oriental Bank of Commerce (OBC) and United Bank of India. “The PNB’s ratings with a positive outlook reflects Moody’s view that the bank’s BCA will likely improve after the capital infusion from the government, and that its financial metrics will gradually improve,” Moody’s said in its statement.
Apart from PNB, Union, Bank, Allahabad Bank, Central Bank and Canara Bank shares are trading up to 1.5% higher in the afternoon trade. PSU stocks including OBC, BoB, Syndicate Bank, SBI and Indian Bank are among the biggest losers shedding up to 2%. The Nifty PSU Bank index is trading flat at 2,375.50. Notably, while Moody’s has upgraded PNB, the global firm has also maintained a stable outlook on Canara Bank, Oriental Bank of Commerce (OBC), Syndicate Bank and Union Bank. The local and foreign currency deposit ratings of these public sector banks were maintained at Ba1/NP, and the BCAs and Adjusted BCA were affirmed at ba3.
Last week, the Narendra Modi-led government announced that banks including PNB, OBC, United Bank will merge to create India’s second largest government-run bank. As part of a mega consolidation drive in PSBs, a total of 10 PSU banks have been merged into 4 anchor banks. Union Bank, Andhra Bank and Corporation Bank will be merged to create India’s 5th largest PSU bank entity, while Canara Bank will be merged with Syndicate Bank to form 4th largest government bank. Finally, Indian Bank will be merged with Allahabad Bank to form the 7th largest PSU bank in India. Terming these as “Nextgen PSBs,” the government noted that the merger is being done to achieve national presence and global reach.