PNB raises ₹1,153 crore via AT-1 bonds

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Punjab National Bank (PNB), country’s second largest public sector bank, on Thursday said that it has raised ₹1,153 crore capital via Additional Tier-1 bonds.

These Basel III-compliant additional Tier-1 bonds have been issued and allotted on a private placement basis, PNB said in a stock exchange filing.

The bonds have been raised at a coupon of 8.55 per cent per annum. There were ten allottees under the private placement. These bonds, which qualify as Tier-I capital, have a face value of ₹ 1 crore each.

PNB Board had earlier approved fund raise of ₹12,000 crore this fiscal. Of this approved amount, PNB had, till September this fiscal, raised ₹ 6090 crore —₹ 3,000 crore AT-1 bonds and ₹3,090 crore in Tier-II capital.

Targets for this fiscal

PNB is looking to close the current fiscal with profits of at least ₹6,000 crore, higher than the earlier guided level of ₹ 4,000 crore. Already in the first half this fiscal, PNB had recorded profit of ₹3,000 crore.

In the second quarter ended September 30, 2023, PNB had reported a 327 per cent increase in net profit at ₹1,756 crore (₹411 crore). This was up 40 per cent over the net profit of ₹1,255 crore in the first quarter this fiscal.

On the asset quality front, PNB has now set its sights on bringing down GNPA to 6 per cent by end March 2024 and net NPA to below 1 per cent by the end of this fiscal.

PNB is targeting recoveries of ₹22,000 crore this fiscal, of which the bank has already recovered ₹ 11,000 crore (as of October 2023).