KEY RATING DRIVERS
Ind-Ra has placed the rating on RWE following the finance ministry’s announcement dated 31 August 2019 on the proposed amalgamation of Punjab National Bank (PNB; ‘IND AA+’/RWE) with OBC and United Bank of India (UBI; ‘IND AA-’/RWE) with PNB being the absorbing bank post amalgamation.
As the announcement will be followed by multiple approvals at various levels, including the boards of these banks, the agency has placed OBC’s ratings on RWE. The key reasons for placing the ratings on RWE are the scale of the mergers and the potential integration-related challenges that may be encountered in the process; the banks may not be ready within the stipulated time (as may be determined later). The RWE indicates that the rating may be affirmed, downgraded or upgraded. Ind-Ra expects to resolve the RWE on the outcome of the merger and the availability of the first set of consolidated quarterly financial results.
Ind-Ra’s views on latest announcement on amalgamation or public sector banks,
COMPLEXITY LEVEL OF INSTRUMENTS
For details on the complexity level of the instrument, please visit https://www.indiaratings.co.in/complexity-indicators
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Ratings are not a recommendation or suggestion, directly or indirectly, to you or any other person, to buy, sell, make or hold any investment, loan or security or to undertake any investment strategy with respect to any investment, loan or security or any issuer.
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About India Ratings and Research: India Ratings and Research (Ind-Ra) is India's most respected credit rating agency committed to providing India's credit markets accurate, timely and prospective credit opinions. Built on a foundation of independent thinking, rigorous analytics, and an open and balanced approach towards credit research, Ind-Ra has grown rapidly during the past decade, gaining significant market presence in India's fixed income market.
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