Moneycontrol
May 18, 2017 06:16 PM IST | Source: Moneycontrol.com

Hold Punjab National Bank; target of Rs 160: ICICI Direct

ICICI Direct recommended hold rating on Punjab National Bank with a target price of Rs 160 in its research report dated May 17, 2017.

Hold Punjab National Bank; target of Rs 160: ICICI Direct

ICICI Direct's research report on Punjab National Bank


PNB had highest RoA, RoE among PSU banks in FY08-10. However, it took a huge knock as deteriorating asset quality led to elevated provisioning, loss of net interest income. Despite gradual growth in business, core earnings stayed weak led by higher slippage.


Outlook


Though we expect slippages to moderate ahead, uncertainty looms in near term on slippages from watchlist and RA book. Hence, we maintain our target price at Rs 160, valuing standalone bank at 1.6x FY19E ABV and housing finance subsidiary at 2x FY19E ABV. With the recent run-up in stock price, we downgrade our rating to HOLD.


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