ICRA assigns LAA ratings to Rs 700cr bond issue of CBI

New Delhi, Oct 11 (UNI) Credit rating agency ICRA today assigned LAA rating, indicating high credit quality and low credit risk, to the Rs 700 crore Tier II bond issue of Central Bank Of India (CBI).

The factors supporting the ratings were 100 per cent government ownership in the bank, ability to mobilise and maintain high proposition of low cost deposits and low liquidiy concerns on the back of large network and excess investment cushion.

However, the ratings were constrained by the asset quality indicators that lags peers, low levels of fee-based income and high vulnerability to interest rate shocks.

CBI is a public sector bank headquatered in Mumbai. In the financial year 2005-2006, it reported net profits of Rs 257 crore on a total income of Rs 5,616 crore. The bank's asset quality has marginally worsened during 2005-2006, with its net NPA as a percentage of network declining to 33 per cent.

The bank had an asset base of Rs 74,173 crore and its regulatory capital adequatecy ratio was 11.03 per cent as on March 31, 2006.

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