ICRA assigns LAAA rating to SBT's Rs 140 cr tier II bond issue
New Delhi, Mar 17 (UNI) ICRA today assigned an LAAA rating to the proposed Rs 140-crore subordinated bonds programme of the State Bank of Travancore (SBT).
This is the highest credit quality rating assigned by ICRA and the rated instrument carries lowest credit risk.
ICRA has also assigned the LAAA rating to the outstanding long term subordinate debt programmes of SBT.
The ratings take into account SBT's strong retail franchise built through its 552 strong branch network which has enabled SBT to build a good retail portfolio, its declining cost of funds, improving asset quality as evident from the lower NPA generation rate and lower gross NPAs and comfortable liquidity position.
The rating also recognises the interest rate risk that the bank is exposed to, on account of its significant investment portfolio, though this is partly mitigated by its stable operating profitability arising from its advances portfolio as well as adequate capitalisation.
The long-term ratings indicate a fundamentally strong position and take into account the State Bank of India's (SBI) 75 per cent stake in SBT and the operational and management synergies in all areas of banking operations.
SBT reported an asset base of Rs 30,000 crore as on September 30, 2005 and a net profit of Rs 103 crore.
UNI RA SD PM1502