Credit rating agency, CRISIL has downgraded its rating on Indian Overseas Bank’s (IOB) Lower Tier II Bonds (under Basel II) to ‘AA/Stable’ from ‘AA+/Stable’, and on the bank’s Tier I Perpetual Bonds and Upper Tier II Bonds (under Basel II) to ‘AA/Negative’ from ‘AA+/Stable’. Further, the rating on the bank’s certificates of deposit programme has been reaffirmed at ‘A1+’.
The bank has received the rating downgrade on expectation of weakening in the bank’s credit profile because of persistent pressure on the bank’s asset quality and earnings profile. The ratings continue to factor in the strong support that IOB is likely to receive from the Government of India (GoI), and its adequate capitalisation.
