Rating agency Icra today downgraded various debt instruments of IDBI Bank owing to a significant erosion of it's common equity tier I (CET 1), following weak financial performance of the bank in the quarter ended December.
Icra has downgraded ratings for the bank's Rs 8,000 crore infrastructure bonds programme, Rs 230.50 crore flexi bonds series and Rs 25,742.72 crore senior and lower tier II bonds programme.
The rating agency also downgraded the rating for the bank's Rs 5,000 crore Basel III complaint tier II bonds to AA-(hybrid) from AA(hybrid), for the Rs 2,500 crore additional tier I bonds programme under Basel III to A(hyb) from A+(hyb) and for the Rs 4,286.20 crore upper tier II and Rs 1,708.80 crore Basel II compliant perpetual bonds programme to A+ from AA-.
"The rating downgrade takes into account the substantially weak operating and financial performance of the bank during the third quarter of the financial year 2016-17 which has resulted in a significant erosion of the bank's capital (CET-I)," Icra said in a statement here today.
It expects the bank to be under significant pressure to meet the minimum regulatory level of 6.75 per cent required as on March 31, 2017 as the bank's CET I stood at 7.24 per cent as on December 31, 2016, prior to adjusting the losses in nine month to the financial year 2016-17.
With limited visibility on capital infusion and continued pressure on profitability, the capital requirements are sizeable and immediate, it said.
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