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Punjab & Sind Bank, LVB get ratings downgrade on various bond programmes

Punjab & Sind Bank and Lakshmi Vilas Bank on Wednesday said rating firms have downgraded their bond programmes totalling over Rs 2,580 crore.

Punjab & Sind Bank | Lakshmi Vilas Bank

Press Trust of India  |  New Delhi 

The scale will make the merged banks efficient, help them expand credit, introduce new products and bring down the cost of money for customers

and on Wednesday said rating firms have downgraded their bond programmes totalling over Rs 2,580 crore.

CARE has downgraded the rating on various bonds issued by the bank totalling Rs 2,537.30 crore, said in a regulatory filing.

The ratings firm has downgraded the ratings on the bank's Rs 1,000 crore Basel III compliant tier-I bonds to CARE A from CARE A+.

Among others, the ratings on lower tier-II bond issuances of Rs 300 crore, Rs 500 crore, Rs 237.30 crore and Rs 500 crore have been downgraded to CARE AA- (double A minus) from CARE AA each.

The outlook on all the five bond issuances remains at 'negative', the public sector lender said.

In a separate filing, private sector (LVB) said Brickwork Ratings India has downgraded the rating from "BWR BB+" (credit watch with developing implications) to "BWR B+" (credit watch with negative implications) for its unsecured redeemable non-convertible subordinated lower tier-II bonds of Rs 50.50 crore.

The rating downgrade necessarily factors in the rejection of seven directors of the bank, including the interim managing director and chief executive officer, by the shareholders, Brickwork said about its rating rationale.

Among others, bank's capital position is substantially weak, there is high level of gross non-performing assets (NPAs) and the bank continues with losses for the past 10 quarter, except for Q4 FY20.

"BWR has noted recent developments in the bank and shall continue to monitor the developments on the proposed amalgamation with the Clix group. The proposed amalgamation is expected to address the concerns on the bank's capital, reduce net NPAs and initiate efforts to exit the PCA required for its business growth," it added.

Stock of closed 0.91 per cent down at Rs 10.84 apiece on BSE. LVB's scrip plunged 9.78 per cent to Rs 16.60.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Wed, October 07 2020. 20:40 IST