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Downgrade cloud on Syndicate Bank

Syndicate's Common Equity-1 level of 7.5% at end-March was weaker than other 'AA+' rated peers

Abhijit Lele 

Bank, Financial institutions, Banks

has downgraded its outlook on Syndicate Bank’s existing Tier-I and Tier-II bonds from ‘stable’ to ‘negative’, due to a weakening credit profile of the Manipal-based public sector lender.

The revision reflects a  perception of elevated levels of credit costs, stretched profitability and limited visibility on meaningful capital infusion. Syndicate’s Common Equity-1 level of 7.5 per cent at end-March was weaker than other ‘AA+’ rated peers. 

The bank would need Rs  4,640 crore of Tier-I capital to maintain a Tier-I ratio of 10 per cent (including a capital conservation buffer of 2.5 per cent) by the end of 2018-19.

First Published: Mon, July 24 2017. 00:20 IST