IDBI Bank outlook moves to ‘negative’
ICRA has revised the ratings outlook of six banks that have received substantial capital infusion from promoters.
The lenders are IDBI Bank, Bank of India, Bank of Maharashtra, Oriental Bank of Commerce, Punjab and Sind Bank, and Punjab National Bank. Outlook for IDBI Bank, which has now been categorised as private sector lender by RBI following stake buy by Life Insurance Corporation of India from the government, has been changed to ‘negative’ from ‘rating watch with developing implication.’
According to the ratings agency, the change in outlook is due to sizeable capital infusion by LIC, as part of its acquisition of a majority stake (51%).
“With this capital infusion, ICRA expects IDBI’s capital levels to remain above the regulatory levels going forward, thereby not posing any challenge for the servicing of its debt capital instruments,” the ratings agency said.
For all the other five banks, outlook has been changed from ‘negative’ to ‘stable’ due to capital infusion by the government. ICRA said capital infusion had reduced asset quality pressures and improved earnings indicators.
Source: Read Full Article