Rating agency Fitch has downgraded ING Vysya Bank to “AA-” from “AA”. However, the outlook on long-term rating remains stable.
The revision reflects Fitch’s view that the bank’s rating was now driven by stand-alone financial performance rather than institutional support, as in the past.
While Fitch continues to factor in a moderate probability of support from its parent bank ING, it recognises the latter has been reviewing its business portfolio. The revision in portfolio is for limiting the number of its markets and simplifying the group structure and operations.
The National LT rating is now solely based on ING Vysya’s stand-alone credit profile, reflected in its individual rating of ‘D’. It takes into account its domestic franchise and sound capitalisation.
The stable outlook reflects ING Vysya’s improving financials and growing competitiveness compared to other banks with ‘D’ individual ratings.
Its profitability ratios have improved steadily over the years, reflecting the successful implementation strategies for controlling costs and growing low-cost retail deposit base.
The bank’s return on assets improved to 0.84 per cent (annualised) as of September 30. It stood at 0.74 per cent in 2009-10. However, its profitability remained below that of larger private banks.
