SBI to approach Moody’s for review and re-ratingMay 18th, 2012 - 10:26 pm ICT by IANS
Kolkata, May 18 (IANS) The country’s biggest lender State Bank of India (SBI) is mulling to approach global credit ratings firm Moody’s Investors Services to “review” its ratings, its chairman said Friday.
“Our Tier I capital has improved to 9.79 percent as of March 31, 2012. Banking on our robust performance and capital adequacy, we plan to approach Moody’s and seek for a review and re-rating,” SBI chairman Pratip Chaudhuri said.
The rating firm had downgraded SBI’s financial strength by one notch to ‘D+’, from ‘C-’ on account of its low Tier-I capital ratio and deteriorating asset quality making overseas borrowings costly for the state-owned lender. The bank reported a Tier 1 capital of 7.60 percent as of June 30, 2011.
The improvement in Tier I capital this year was primarily on account of fund infusion to the tune of Rs.8,000 crore by the union government in March this year.
“Apart from this, we have also had a robust internal generation and we are taking huge efforts in optimising use of capital by going in for various credit guarantee schemes,” Chaudhuri said.
The bank has also witnessed a reduction in its non-performing assets (NPAs) this year. “We had declared a war against NPAs and as a result this quarter (Q4), we have seen a reduction in the gross NPAs on a sequential basis.”
“The bank does not expect any further sharp depreciation in its assets quality,” he added.
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