S&P places IDBI Bank 'BB/B' ratings on credit watch negative, shares fall by 10 pc
Mumbai (Maharashtra) [India], Aug 28 (ANI): Global rating agency S&P has placed IDBI Bank on credit watch, citing uncertainty over its ability to meet capital requirements over the next few months.
ANI
Aug 28, 2019 11:57 IST
Mumbai (Maharashtra) [India], Aug 28 (ANI): Global rating agency S&P has placed IDBI Bank on credit watch, citing uncertainty over its ability to meet capital requirements over the next few months.
IDBI is in breach of its regulatory capital requirements after a substantial loss in the first quarter of fiscal 2020, said S&P Global Ratings.
"We believe the breach is temporary and a capital infusion by LIC and the government could help IDBI to replenish capital. We are placing our 'BB/B' foreign-currency issuer credit ratings on IDBI and the 'BB' long-term issue rating on the bank's senior unsecured notes on credit watch with negative implications, given the uncertainty regarding the bank's ability to meet its capital requirement in the next three months."
S&P said it aims to resolve the credit watch in the next three months once it has clarity on the bank's plan and timeline for shoring up its capital base, such that it maintains a sufficient buffer above the regulatory minimum.
The bank expects to raise capital from its majority shareholders -- Life Insurance Corporation (51 per cent) and the government (46 per cent) -- before September 30 to meet the shortfall. "But the quantum and timing of the capital infusion are uncertain in our view," said S&P.
At 11:45 hrs, shares of IDBI Bank were trading 9.7 per cent lower at Rs 26.60 apiece.
(ANI)
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