minus rating for BoR subordinated bonds
13 October 2004
CARE has assigned a 'CARE A-' [A minus] rating to the
proposed Rs95 crore-Tier II subordinated bond issue of
the Bank of Rajasthan Ltd. (BoR).
with this rating are considered upper medium grade instruments
and have many favourable investment attributes. Safety
for principal and interest are considered adequate. Assumptions
that do not materialise may have a greater impact as compared
to the instruments rated higher.
rating factors in the long track record of operations
of the bank, low cost deposit base, improved net interest
income and profitability, improving asset quality during
the last three years and satisfactory capital adequacy.
The rating is, however, constrained by high dependence
on treasury profits, relatively higher growth in investments
in relation to advances, low level of advances (much lower
CD ratio in relation to peers) with moderate credit quality,
nascent risk management
systems and high interest rate risk associated with the
investment portfolio of the bank. The rating also factors
the track record of the promoter group.
of reports on Bank of Rajasthan
of general reports on Banks