June 4, 2018 / 5:10 AM / 21 days ago

BUZZ-India's Punjab National Bank: HSBC cuts PT

** HSBC cuts PT on Punjab National Bank (PNB) to 71 rupees from 92 rupees, maintains ‘reduce’ rating

** “We remain cautious despite significant underperformance due to a dim earnings outlook, significant capital erosion, and likely dilution given weak CET1 and low valuations,” HSBC analysts say in a note

** HSBC expects the fraud-hit bank to post third consecutive annual loss in FY19, hurt by higher provisioning and slower loan growth

** India’s second-largest state-run bank posted the biggest ever loss by an Indian lender for March qtr

** HSBC reiterates rating due to uncertainties in the medium term in growth and asset quality

** Seven of 33 brokerages rate the stock “buy” or higher, 12 “hold” and 14 “sell” or lower; their median PT is 94 rupees - Thomson Reuters Eikon data

** Up to Friday, stock has shed nearly 50 pct since Feb 12, when PNB detected fraudulent transactions at a Mumbai branch

** In comparison, Nifty PSU Bank index fell over 15 pct in the same period

** PNB’s shares were trading 2.4 pct higher at 84.90 rupees on Monday morning

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