CRISIL upgrades IOB's Basel III compliant tier II bonds from 'A+' to 'AA-'

Rating agency CRISIL has upgraded Indian Overseas Bank’s (IOB) Basel III compliant tier-II bonds from “A+” to “AA-” on strengthened capital position and steady improvement in the earnings profile.

In September 2021, the Reserve Bank of India had taken out the Chennai-based public sector lender from the Prompt Corrective Action (PCA) framework (PCA). IOB was placed under PCA in October 2015 on account of high Net-Performing Assets (NPAs) and negative Return on Assets (RoA).

CRISIL, in a statement, said the capital position has been supported by regular fund infusion and expectation of strong support from the majority stakeholder, the government.