Business News | Ind-Ra Affirms Bank of Baroda at AAA with Stable Outlook

Mumbai (Maharashtra) [India], Sep 6 (ANI): India Ratings and Research (Ind-Ra) has affirmed Bank of Baroda's (BoB's) long-term issuer rating at AAA with a stable outlook and short-term issuer rating at A1-plus.

The ratings continue to reflect BoB's highly-systemically important position and hence a high probability of support from the government which has 63.97 per cent if required.

Also Read | Interview With the Man Behind One of Australia's Biggest Immigration Firms.

Ind-Ra said the ratings also reflect BoB's large franchise with a pan-India presence, strong capitalisation, adequate funding base and liquidity, and an in-line-with-peers' provision coverage ratio (PCR).

Slippages for BoB although remained elevated have declined on a year-on-year basis in FY21 and it remains a key monitorable in the near term.

Also Read | The First Psychedelic Stock to Go ‘All-Natural’ Has Analysts Seeing Green.

The AT1 bonds rating reflects the bank's strong standalone credit profile, along with its ability to service coupons and manage principal write-down risk on its debt capital instruments.

To arrive at the rating, Ind-Ra considered the discretionary component, coupon omission risk and the write-down/conversion risk as key parameters.

The agency recognised unique going-concern loss absorption features that these bonds carry and differentiates them from the bank's senior debt, factoring in a higher probability of an ultimate loss for investors in these bonds.

Ind-Ra said it envisages coupon deferrals and principal write-down risk as a remote possibility in view of the bank's adequate revenue reserve buffers.

At end-1Q FY22, BoB had a network of 8,192 branches within India, 96 overseas offices across 19 countries, and 11,637 ATMs and cash recyclers.

Of the gross advances book, 36.3 per cent consisted of loans to the corporate segment, 16.8 per cent to retail, 12.3 per cent to micro, small and medium enterprises, 13.6 per cent to agriculture and 5.5 per cent were others.

International advances constituted 15.5 per cent of the gross advances. (ANI)

(The above story is verified and authored by ANI staff, ANI is South Asia's leading multimedia news agency with over 100 bureaus in India, South Asia and across the globe. ANI brings the latest news on Politics and Current Affairs in India & around the World, Sports, Health, Fitness, Entertainment, & News. The views appearing in the above post do not reflect the opinions of LatestLY)