Fitch places the bank on watch after the fraud comes to light
GN Bureau | February 20, 2018
The large-scale fraud perpetrated on Punjab National Bank has hit its rating. Fitch Ratings has placed its Viability Rating of 'bb' on Rating Watch Negative (RWN). The rating firm said it will resolve the Rating Watch “once more clarity emerges on the extent of control failures and the impact on PNB's financial position”.
“At this stage, Fitch does not view this event to have an impact on PNB's Support Rating Floor (BBB-) due to the bank's high systemic importance as the second-largest state-owned bank. We believe that the state's propensity to provide extraordinary support to PNB remains high, subject to the sovereign's ability, which is captured in India's sovereign rating of 'BBB-',” it said in a release.
The RWN reflects the possibility of a downgrade of PNB's Viability Rating following the detection of a large fraud in one of the bank's branches amounting to $1.8 billion. While the exact financial impact from this event is still being ascertained, it has raised questions on both internal and external risk controls as well as the quality of management supervision considering that the fraud went undetected for several years.
PNB's asset quality and capital parameters continue to be weak but have shown some stability since Fitch's rating action in June 2017. For the nine months of financial year to December 2018 PNB's non-performing loan (NPL) ratio eased to 12.1% (12.5% FYE17) while its CET1 ratio improved to 8.05% (7.9%). Profitability continued to be weak but the bank raised Rs 50 billion ($770 million) in fresh equity from the capital markets in 3QFY18. PNB is also likely to get an additional Rs 54 billion ($850 million) from the government by end-March 2018 under the government's recapitalisation agenda.
As the government is set to roll out the 5G spectrum auction, the network providers are also equipping 5th generation network-ready LTE technology. According to the government, the technology would have an impact of more than $1 trillion on the Indian economy. It is also expected to transform educati
Punjabi singer, songwriter, and guitarist, Rabbi Shergill rose to fame in 2004 with his chartbuster song ‘Bullah Ki Jaana’ from his debut album ‘Rabbi’. Inspired by rock and Punjabi folk music, he uses Punjabi language to create acoustic rock-based ballads. His poetic and social
National Aluminium Company Limited (NALCO), country’s leading manufacturer and exporter of alumina and aluminium, has posted an operating profit of Rs 589 crore in Q3 of 2018-19 FY, registering 80 percent growth over the same period of last year. Net profit of the company
In 2016, 44.7 million tonnes of e-waste was generated globally which is expected to increase to 52.2 million tonnes in 2021. As of 2016, it was found out that India is the second and fifth highest generator (in Asia and globally respectively) of e-waste with 2 million tonnes. The mounting pile of e-waste h
Union power minister RK Singh has said the per capita current power consumption of 1,200 units is expected to grow 2-3 times at par with the international consumption after every Indian gets access to electricity. Singh said the power sector is witnessing an increased demand which is further expect
SAIL has posted a profit (profit after tax) of Rs 616 crore in Q3 of 2018-19 FY. SAIL has managed to better its performance over the previous quarter as well by more than 11 percent when it stood at Rs 554 crore. The turnover for Q3 FY’19 improved by three percent over corresponding period of