ICRA reaffirms high credit quality rating to UBI's bonds prog

New Delhi, Oct 23 (UNI) ICRA has reaffirmed the LAA+ rating to the outstanding one billion rupees long-term subordinated bond programme of the Union Bank of India (UBI) while maintaining A1+ rating to the existing Rs 20 billion Certificates of Deposit Programme of the bank.

The ratings indicate high-credit-quality and low risk of both the instruments of the bank.

The ratings take into account UBI's improving core operating profitability, its satisfactory capitalisation and liquidity. The rating also factors in the relatively lower, though growing fee based income, as compared to other banks, moderate asset quality, the market risk on the bank's investment portfolio in a rising interest rate scenario and the bank's need to raise capital for meeting its growth plans.

UBI's significant position in the Indian financial system as the seventh largest bank in the country, and the Government of India's (GoI) majority ownership in the bank also support the ratings.

Majority owned by the GoI, UBI is the seventh largest commercial bank in the country with an asset base of Rs 88,600 crore as on March 31, 2006. UBI has a network of 2,085 branches.

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