Mumbai: Fitch Ratings has downgraded Punjab National Bank’s viability rating- its view on the bank’s creditworthiness to 'bb-' from 'bb' implying higher risk of default by the bank. It has maintained the rating on Rating Watch Negative (RWN). PNB 's other ratings are unaffected by this downgrade.“The downgrade follows our assessment of how losses resulting from fraudulent transactions reported in February 2018 will affect the bank's financials, including its earnings and core capitalisation” said Fitch in a release on Tuesday. The downgrade also reflects the bank's risk controls, which it thinks are weaker than what it had previously believed, since the fraud was undetected for several years and acquired a large scale of $2.2 billion. However, profitability may improve faster than our expectations in FY19 if some large NPL accounts are resolved during the course of the year.

Source: Economic Times April 10, 2018 13:03 UTC