106th Day Of Lockdown

Maharashtra2237241231929448 Tamil Nadu118594711161636 Delhi102831742173165 Gujarat37636267441978 Uttar Pradesh2996819627313 Telangana2761216287313 Karnataka2681511100417 West Bengal2383715790804 Rajasthan2140416575472 Andhra Pradesh211979745252 Haryana1799913645279 Madhya Pradesh1562711768622 Bihar12525933898 Assam12523833016 Odisha10097670354 Jammu and Kashmir89315399143 Punjab67494554175 Kerala5895345228 Chhatisgarh3415272814 Uttarakhand3230262143 Jharkhand3018210422 Goa190311568 Tripura171612481 Manipur14307710 Himachal Pradesh107876410 Puducherry104351714 Nagaland6443030 Chandigarh4924017 Arunachal Pradesh270922 Mizoram1971390 Sikkim125650 Meghalaya94432
Business Companies 11 Feb 2019 S&P affirms IOB& ...

S&P affirms IOB's ratings, keeps outlook stable

PTI
Published Feb 11, 2019, 5:24 pm IST
Updated Feb 11, 2019, 5:24 pm IST
Indian Overseas Bank breached its regulatory capital requirements after a loss in the third quarter of FY19.
IOB's tier-I capital ratio was 6.95 percent below the minimum regulatory requirement of 7 percent. (Photo: File)
 IOB's tier-I capital ratio was 6.95 percent below the minimum regulatory requirement of 7 percent. (Photo: File)

Mumbai: International rating agency S&P Global on Monday affirmed credit rating of state-run Indian Overseas Bank (IOB) at 'BB' and 'B' on expectation of government's capital infusion.

The lender's outlook has also been kept stable.

 

The bank breached its regulatory capital requirements after a loss in the third quarter of FY19.

Its tier-I capital ratio was 6.95 percent below the minimum regulatory requirement of 7 percent.

It's capital shortfall to meet that regulatory minimum was about Rs 62.5 crore as of December 31, 2018.

"We expect IOB to receive substantial capital from the government before the end of this fiscal year in March 2019 to materially improve the bank's headroom above the regulatory minimum tier-I capital ratio of 7 percent," the rating agency said in a note.

The bank's capital position improved in Q4 of FY19 through an employee stock purchase scheme (ESPS) and sale of non-core assets for which it has received initial payment.

The agency said any lengthy delay in capital infusion from the government may leave the bank unable to meet its regulatory capital requirement at fiscal year-end.

"As a result, we would likely to lower the issuer credit rating by at least two notches," the agency said.

The bank made improvements in the past few quarters on parameters such as operating profits, cost efficiency, and growing low-cost deposits, among others.

The agency, however, said it expects the bank to make losses in the current fiscal year.

It said the bank's poor asset quality reflects weakness in its underwriting standards and aggressive growth in the past.

The agency said it could lower the rating on the bank by at least two notches if capital support is delayed or the capital injection is lower than our expectation.

...




ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT