Icra downgrades long-term rating for Syndicate Bank's Basel-III bonds

Icra has downgraded the long-term rating for public sector lender Syndicate Bank’s Basel-III compliant Tier II bonds from “AA+” to “AA”. The outlook on the rating is negative.

The rating downgrade factors in the bank’s weak financial performance as reflected in the elevated level of fresh slippages, increasing non-performing advances (NPA) level, high losses and consequently weakened capital ratios, Icra said in a statement.

The bank posted a net loss of Rs 12.82 billion in quarter ended June 2018 (Q1FY19) as against Rs 2.63 billion in April-June 2018 (Q1FY18). 

Given the expectation that the high level of slippages will continue in FY19, the