ICRA assigns LAA+ rating to IOB's Subordinated Bond

New Delhi, Mar 7 (UNI) Credit rating agency ICRA has assigned an LAA+ rating to the Rs 300 crore Subordinated Bond Programme of the Indian Overseas Bank (IOB), indicating high credit quality.

The rated instrument carries low credit risk.

IOB's ratings take into account the consistent growth maintained in credit over the past several years, the improvement achieved in its asset quality, and the bank's improving core profitability.

The rating also draws comfort from IOB's domestic retail deposit base, its adequate capitalisation and its majority ownership by the Government of India.

The rating factors the challenges the bank faces in terms of continuing to adequately manage the credit risk arising out its substantial exposure to mid-tier corporates and its ability to grow its retail advances portfolio without impacting overall asset quality.

The Government of India has a 61 per cent ownership in IOB, which has an asset base of Rs 50,700 crore as on 31 March, 2005.

UNI RA SD DS1505