For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

Bonds Of Lakshmi Vilas Bank Downgraded

|

Rating agency CARE has downgraded some of the bonds of Lakshmi Vilas Bank to CARE Double B Minus; Outlook: Negative from CARE Double B Plus; Outlook: Negative.

The revision in ratings assigned to the various debt instruments of The Lakshmi Vilas Bank factors in the sharp decline in networth due to significant losses reported in FY20 (refers to period from April 01 to March 31) and Q1FY21 (refers to period from April 01 to June 30) consequent to losses reported during these period.

Bonds Of Lakshmi Vilas Bank Downgraded
 

"The bank reported total CAR and Tier I CAR of 0.17% and -1.83% respectively as on June 30, 2020. The ratings continue to derive strength from the long-standing operational track record of Lakshmi Vilas Bank Ltd and its established presence in Southern India.

The ratings are constrained by Lakshmi Vilas Bank regional nature of operations, weak asset quality parameters, weak capitalisation levels and continuation of losses in Q1FY21. The rating also takes note of decline in total business of the bank due to capital constraints and the recent changes in the board. In view of current capital adequacy levels, timely mobilisation of capital to augment its CAR is critical in the near term," rating agency CARE said while releasing the latest downgrades on the bonds.

According to the rating agency, the negative outlook on rating reflects the likely continuation of negative networth in view of delay in mobilising fresh capital.

"Timely mobilisation of significant amount of equity capital is critical to improve capital adequacy levels. The outlook may be revised to stable in the event of improvement in capitalisation levels well above regulatory requirement," CARE has stated.

Read more about: lakshmi vilas bank
Story first published: Saturday, October 10, 2020, 10:22 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X