Rating agency, Moody’s Investor Service has downgraded Bank of India’s debt programmes' ratings by one notch, citing an accelerated pace of asset quality deterioration, stressed core capital levels and increased pressure on profitability. Rating agency has revised its Bank Financial Strength Rating to D from D+ on a scale of A to E. India’s sovereign rating is Baa3. However, it affirmed the outlook on the debt and deposit ratings at stable.
The bank’s non-performing loans rose to 2.74% by December-end from 2.23% in March 2011, while its net income dropped 14%. The bank’s return on risk weighted assets fell to 1.03% in the nine months to December 31 from 1.51% a year ago. In addition, the bank is expecting bad loans in the financial year ending in March 2012 to be lower than the previous year.
