CRISIL Ratings has also assigned its ‘CRISIL AA+/Stable’ rating to the Rs1,800cr tier II bonds (under Basel III) and reaffirmed its ‘CRISIL AA+/Stable/CRISIL A1+’ ratings on the Tier II Bonds (under Basel III) and the certificate of deposit.
CRISIL Ratings has also withdrawn its rating on the tier II bonds (under Basel III) of Rs1500cr in-line with its withdrawal policy. CRISIL has received independent verification that these instruments are fully redeemed.
According to the rationale, the upgrade in the rating of Tier I bonds (under Basel III) factors in improved position of BOI to make future coupon payments, supported by an adjustment of accumulated losses with share premium account, and the improved capital ratios.
The overall ratings continue to reflect the expectation of strong support from the majority stakeholder, GoI, and the established market position and comfortable resource profile of the bank. These strengths are partially offset by weak asset quality and modest earnings profile.
For arriving at its ratings, CRISIL Ratings has combined the business and financial risk profiles of BoI and all its wholly-owned subsidiaries. CRISIL has also factored in the strong support that the bank is expected to receive from GoI, both on an ongoing basis and in the event of distress.
At around 12:50 PM, Bank of India was trading at Rs55.25 per piece up by Rs0.55 or 1.01% on Sensex.