Credit rating agency, CRISIL has downgraded its ratings on United Bank of India’s Tier II Bonds (under Basel III) and Lower Tier II Bonds to ‘AA’ from ‘AA+/Negative’, and Tier I Perpetual Bonds to ‘AA-’ from ‘AA/Negative’. The ratings have also been placed on ‘Rating Watch with Negative Implications’.
The rating downgrade reflects the weakening in United Bank’s credit risk profile because of sharp deterioration in the bank’s asset quality and earnings profile.
United Bank of India reported a net loss of Rs 489.47 crore for the second quarter ended September 30, 2013 as compared to a net profit of Rs 144.63 crore for the same quarter in the previous year. However, total income of the bank increased by 13.60% at Rs 2876.77 crore for quarter under review as compared to Rs 2532.39 crore for the quarter ended September 30, 2012.
