Exim Bank well placed to absorb asset quality stress: Moody's
Asset quality of Export-Import (Exim) Bank of India has deteriorated in the last one year, but the company is still well placed to absorb the stress as a large number of its loans are backed by government and are structurally safe, ratings agency Moody's said Tuesday.
"As is the case of other Indian banks with corporate exposures, Exim India has seen increasing pressure on the quality of its loan book over the last 12-18 months," Srikanth Vadlamani, a Moody's vice president and senior analyst, said in a report.
"However, there are a number of factors that we believe have contained the impact on Exim's credit profile from these asset quality pressures, which led us to maintain our ba2 baseline credit assessment on Exim India," said Vadlamani.
In the report titled, "Exim India Well Placed to Absorb Asset Quality Stress," Moody's pointed out that a large portion of Exim India's loan book (45 percent) consists of a mix of loans to foreign governments that are backed by an explicit guarantee from the Government of India and loans to other banks in India, the majority of which is implicitly supported by the government.
"As such, much of its loan book is structurally immune to typical commercial credit-cost risks."
Diversification and strong loss-absorbing buffers will contain the risks associated with corporate loans, it said.
"The broad diversification characterising the corporate side of the loan book will help avoid any dramatic decline in asset quality and in Exim India's strong buffers against downside scenarios," said Vadlamani.
The bank also benefits from a reasonably high net interest margin when adjusted for the underlying credit risk.
Moody's affirmed the Baa3 rating of Exim India's deposits and long-term senior unsecured debt with a stable outlook.
(Posted on 20-05-2014)
Information on States of India:
Andaman Nicobar | Andhra Pradesh | Arunachal Pradesh | Assam | Bihar | Chandigarh | Chhattisgarh | Dadar Nagar Haveli | Daman Diu | Delhi | Goa | Gujarat | Haryana | Himachal Pradesh | Jammu Kashmir | Jharkhand | Karnataka | Kerala | Lakshadweep | Madhya Pradesh | Maharashtra | Manipur | Meghalaya | Mizoram | Nagaland | Orissa | Pondicherry | Punjab | Rajasthan | Sikkim | Tamil Nadu | Tripura | Uttar Pradesh | Uttaranchal | West Bengal
INDIA REGIONAL MAPS:
Andhra Pradesh Travel Map | Bihar Travel Map | Goa Travel Map | Gujarat Travel Map | Haryana Travel Map | Himachal Pradesh Map | Karnataka Travel Map | Kerala Travel Map | Maharashtra Travel Map | Punjab Travel Map | Rajasthan Travel Map | Sikkim Travel Map | Tamil Nadu Travel Map | Uttar Pradesh Travel Map | West Bengal Travel Map |
KERALA TRAVEL MAPS:
TRAVEL MAPS OF INDIA:
INDIA CITY MAPS: