AB gets national rating for debt programme

Hyderabad, Jan 8 (UNI) Fitch Ratings had assigned a 'AA', a National rating to Andhra Bank's subordinated debt programme.

The agency also accorded to the bank the National long-term rating at 'AA+(ind)', Short-term rating at 'F1+(ind)', 'F1+(ind)' for INR15bn certificates of deposit programme, individual rating at 'C/D' and support rating at '4', a release here said.

The ratings reflect the bank's consistently above average financials among the Government banks. The ratings also reflect its predominately regional presence and its moderate size. AB's gross NPL ratio had remained among the best for the Government banks due to its sustained focus on recoveries and its aggressive write-offs.

Furthermore, AB's loan loss coverage was higher and along with increased general provisions, provide cushion against a deterioration in asset quality. The bank's ability to raise common equity was limited, given the 51.6 per cent Government stake in the bank.

Bank's higher Tier-1 ratio compared to that of the other Government banks and the recent regulatory change which permits banks to issue preference shares, meant that AB has satisfactory headroom to raise hybrid and subordinated debt.

UNI VA KVV JS1703