CARE upgrades by a notch AT1 bonds ratings of 4 state-owned lenders

Agency sees improvement in capital cushions over minimum regulatory requirement, improvement in profitability.

CARE upgraded by a notch ratings for additional tier I bonds (AT I bonds) of state-owned Canara Bank, Indian Bank, Punjab National Bank and Union Bank on strengthening of their credit profile, said the analyst.

AT I Bonds are perpetual debt instruments banks raise under the Basel III capital framework and form a part of Tier I capital for banks.

CARE upgraded Canara Bank and Indian Bank from “AA” to “AA+”. Punjab National Bank and Union Bank’s bonds moved from “AA-” to “AA”.

There is improvement in capital cushions over minimum regulatory requirement, improvement in both profitability as well as the distributable reserves