Punjab National Bank (PNB) is planning to raise capital

Punjab National Bank (PNB) has decided to raise the capital through share sale and Tier-II bonds. Board of directors has approved raising Rs 10,000-crore capital of which, Rs 7,000 crore will be raised through qualified institutional placement (QIP) and follow-on public offer (FPO). PNB decided to raise capital after the board meeting held on the combined balance sheet of the amalgamated bank. PNB merged Oriental Bank of Commerce and United Bank of India with itself on April 1, 2020.

The common equity tier 1 (CET 1) capital of the amalgamated entity came down to 9.17% after the alignment of the balance sheet. The CET1 ratio of PNB stood at 11.9% before the merger. Similarly, the bank’s total capital adequacy ratio came down to 12.32%, as against 14.14% before the merger.  During 2019-20 Rs 16,091 crore was infused to PNB by the government. The government holding in the bank has risen to 85.59%, which as 75.41% in March 2019, as per the latest report given by the bank.

PNB is a Banking and financial service institution owned by the Government of India with its headquarters is in New Delhi, India. It was established in 1894 and is the second-largest public sector bank (PSB) in India, both in terms of business and its network. It was founded by Dyal Singh Majithia and freedom fighter Lala Lajpat Rai.

Several banks have announced plans to raise capital to absorb Covid-19 shock and strengthen balance sheets. ICICI Bank is planning to raise Rs 15,000 crore through a share sale. State Bank of India will take shareholders’ approval to raise Rs 20,000 crore in the annual general meeting (AGM) to be held on July 14. Federal Bank, Axis Bank and Kotak banks are private sector banks which planning to raise the capital.