CRISIL ''P1+'' for ING Vysya Bank''s enhanced CD programme

By Our Banking Bureau | 01 Feb 2005

1
Rs 8 billion Certificate of Deposit programme (enhanced from Rs 2 billion)
P1+
Aggregating Rs 3.5 billion Bond programme
AA+/Stable (Reaffirmed)

CRISIL has awarded the P1+ rating to ING Vysya Bank Limited's (ING Vysya Bank) certificates of deposit and reaffirmed its earlier AA+ rating for the bank's bonds. This reflects the comfort afforded by the bank's management being principally controlled by the ING Groep NV of the Netherlands (rated 'A+/Positive/A1+' by Standard & Poor's), which holds a 44 per cent stake in the bank).

This relationship also gives ING Vysya Bank access to management and technical support from ING Groep's 100 per cent subsidiary, ING Bank NV (ING Bank). The rating also reflects ING Vysya Bank's adequate capital position, moderate but improving resources and earnings profile, and average asset quality.

The bank's operations are mainly concentrated in the southern Indian states of Karnataka, Andhra Pradesh and Tamil Nadu, where it has a good reach, especially in rural areas. It now plans to broad base its business profile by geographically expanding in western and northern India. ING Vysya Bank had an asset base of Rs131.98 billion as at March 31, 2004, and reported a profit after tax (PAT) of Rs590.0 million for FY2003-04. It has reported a loss of Rs492.4 million in the first half of FY 2004-05, owing to a diminution in treasury portfolio amounting to Rs1.3 billion.

Outlook: ING Vysya Bank will continue to benefit from support extended by ING Groep NV of the Netherlands. CRISIL says that — Indian regulations permitting — ING Groep will increase its equity stake to acquire a majority ownership in ING Vysya Bank. Besides, the improvement in ING Vysya Bank's resources, earnings profile and asset quality would sustain its ratings at the current level.

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