ICRA upgrades credit ratings of Bank of Maharashtra; Stock trades higher

14 Jun 2022 , 03:07 PM

ICRA has upgraded its ratings on Bank of Maharashtra’s Tier II Bonds worth total Rs2600 crore.

As per the rating rationale report, the rating has been upgraded to [ICRA] AA (Stable) from [ICRA] AA- (Stable)

The rating upgrade factors in the sustained improvement in Bank of Maharashtra’s (BoM) solvency profile led by the improvement in its earnings profile along with a capital raise via a qualified institutional placement (QIP) in July 2021.

Further, the rating also considers the majority sovereign ownership of BoM and its above-average resource profile, supported by an established retail network with a strong presence in Maharashtra. The bank has a fairly high level of low-cost current account and savings account (CASA) deposits, which translates into a granular deposit base and competitive cost of funds. This is expected to support a steady improvement in its operating profitability.

The Stable outlook on the rating factors in ICRA’s expectations that BoM will largely be able to absorb incremental credit losses through its operating profits, while continuing to improve its asset quality and solvency position, and will maintain sufficient capital cushion over the regulatory levels.

At around 3:13 PM, Bank of Maharashtra was trading at Rs16.30 per share up by Rs0.1 or 0.62% from its previous closing of Rs16.20 per share on the BSE.