Fitch Affirms Union Bank of India, PNB Rating at BBB- with Stable Outlook

Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of Union Bank of India and Punjab National Bank (PNB) at ‘BBB-‘ with a stable outlook. The rating reflects strong government support, a favorable operating environment, and improved risk profiles. Additionally, the banks’ viability ratings (VR) have been upgraded from ‘b+’ to ‘bb-‘, highlighting their enhanced financial performance and asset quality.

Key Highlights

Affirmed Ratings

  • Union Bank of India & PNB: IDR at ‘BBB-‘ (Stable Outlook).
  • Viability Rating (VR) upgraded to ‘bb-‘ from ‘b+’.
  • Government Support Rating (GSR) at ‘BBB-‘.

Government Support & Systemic Importance

  • Union Bank of India: 75% government ownership.
  • Punjab National Bank: 70% government ownership.
  • High probability of government support due to systemic importance.

Improved Financial & Risk Profile

  • Growth in India’s economy supports business profitability.

Union Bank of India

  • Asset-quality score outlook revised to Positive from Stable.
  • Risk profile score upgraded to ‘b+’ from ‘b’.
  • Better loan diversification and reduced corporate loan risk.

PNB

  • Risk profile score upgraded to ‘b+’ from ‘b’.
  • Limited unsecured retail loan exposure.
  • Impaired-loan ratio fell to 4.1% (9MFY25) from 5.7% (FY24).
  • Earnings & profitability score revised to ‘bb-‘ from ‘b+’ due to improved performance.
Summary/Static Details
Why in the news? Fitch Affirms Union Bank of India, PNB Rating at BBB- with Stable Outlook
Banks Rated Union Bank of India & Punjab National Bank (PNB)
IDR Rating ‘BBB-‘ (Stable)
Viability Rating (VR) Upgraded to ‘bb-‘ from ‘b+’
Government Support Rating (GSR) ‘BBB-‘
Government Ownership Union Bank: 75%, PNB: 70%
Risk Profile Score Upgraded to ‘b+’ from ‘b’ for both banks
Asset-Quality Outlook Revised to Positive from Stable
Impaired-Loan Ratio PNB: Fell to 4.1% (9MFY25) from 5.7% (FY24);

Union Bank: Expected to decline further

Profitability Score PNB: Revised to ‘bb-‘ from ‘b+’ due to strong financial performance
Shivam

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