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Credit rating agency ICRA has lowered the ratings of various bond programmes of UCO Bank due to deterioration in the asset quality.
A press release issued by ICRA said the ratings on the bank's Rs 1,075 crore Lower Tier II bond have been cut to “AA” from “AA+.”
ICRA also revised the ratings of the Rs 500-crore Upper Tier II bond and the Rs 185-crore Innovative Perpetual Debt Instrument to ‘AA-' from ‘AA'.
The long- term ratings carry stable outlook, said the release.
UCO's asset quality deterioration is reflected in increase in the ratio of gross non-performing assets to total assets to 3.49 per cent as on December 2011, from 2.57 per cent as on December-2010.
This was on account of rise in NPAs in large corporate, agri, retail and MSME segments, and adoption of system-based NPA recognition.
The bank has a high level of standard restructured advances and relatively high exposure to vulnerable sectors such as weak state electricity boards or distribution companies and aviation sector, said the ICRA report.
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