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IDBI Bank Ltd Audit Report / Information 2021
59003_rns_2021-06-03_d854bff9-3445-4116-8e6c-fbf60557e54f.PDF
Audit Report / Information
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CIN: L65190MH2004G01148838
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IDBI Bank Limited Regd. Office : IDBI Tower, WTC Complex, Cuffe Parade, Mumbai - 400 005. TEL.: (+91 22) 6655 3355, 2218 9111 FAX : (+91 22) 2218 0411 Website : www.idbi.com
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| The Manager (Listing) | The Manager (Listing) |
|---|---|
| BSE Ltd., | National Stock Exchange of India Ltd., |
| 25th Floor, Phiroze Jeejeebhoy Towers, | Exchange Plaza, 5th Floor, |
| Dalal Street, Fort, | Plot No.C/1, G Block, |
| Mumbai - 400 001 | Bandra Kurla Complex, Bandra(E), |
| Mumbai - 400 051 |
Dear Sir,
Affirmation of Ratings by Fitch
This is to inform that Fitch Ratings has released Ratings on June 02, 2021, wherein it has affirmed its Long-Term Issuer Default Ratings (IDR) at 'BB+' with a 'Negative' outlook, and Viability Rating at 'ccc+'. Concurrently, Fitch is also withdrawing all ratings on IDBI Bank for commercial reasons. Their rationale for rating is attached herewith.
It may be mentioned that the MTN Bonds rated by Fitch were fully repaid on November 30, 2020, the Bank had terminated the rating engagements/ agreement with Fitch for various issues made under the MTN Bond Programme on May 21, 2021.
You are requested to kindly take the above intimation on record in terms of the provisions of Regulations 30 & 51 of SEBI (LODR) Regulations, 2015.
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RATING ACTION COMMENTARY
Fitch Afrms and Withdraws IDBI Bank Limited's Ratings
Wed 02 Jun, 2021 - 9:44 AM ET
Fitch Ratings - Singapore - 02 Jun 2021: Fitch Ratings has afrmed IDBI Bank Limited's (IDBI Bank) Long-Term Issuer Default Rating (IDR) at 'BB+' and Viability Rating at 'ccc+'. The Outlook on the IDR is Negative.
Concurrently, Fitch is withdrawing all ratings on IDBI Bank. A full list of rating actions is at the end of this rating action commentary.
Fitch has chosen to withdraw the ratings on IDBI Bank for commercial reasons.
KEY RATING DRIVERS
There has been no material change in IDBI Bank's credit prole since the previous rating action on 3 December 2020. For more information on the drivers of IDBI Bank's ratings, please see 'Fitch Afrms IDBI Bank Limited at 'BB+'/Negative; Upgrades Viability Rating to 'ccc+'' at https://www.tchratings.com/site/pr/10144972, and the credit report titled 'IDBI Bank Limited' published in February 2021 at https://www.tchratings.com/site/re/10152814.
RATING SENSITIVITIES
Rating sensitivities are not applicable as the ratings have been withdrawn.
International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (dened as the 99th percentile of rating
transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (dened as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specic best- and worst-case scenario credit ratings, visit https://www.tchratings.com/site/re/10111579
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REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
ESG CONSIDERATIONS
IDBI Bank has an ESG Relevance Score of '4' for Governance Structure due to our assessment that key governance aspects, in particular board independence and effectiveness, ownership concentration and protection of creditor or stakeholder rights are a moderate inuence on the VR. It has a negative impact on the credit prole, and is relevant to the ratings in conjunction with other factors. Fitch views governance to be less developed for state banks, which is evident from weak underwriting that results in high levels of poorly performing loans and credit losses. IDBI Bank's board is dominated by government appointees, and its business models often focus on supporting government strategy with lending directed towards promoting socioeconomic and macroeconomic policies, which may include lending to government-owned companies. These factors also drive our view on the bank's state linkages that affect support prospects that drive the long-term ratings.
IDBI Bank has an ESG Relevance Score of '4' for Financial Transparency due to our assessment that the quality and frequency of nancial reporting and the auditing process are a moderate inuence on the VR. It has a negative impact on the credit prole, and is relevant to the ratings in conjunction with other factors. These factors have become more prominent in the past few years because of the sharp nancial deterioration at state banks as well as the widely reported divergences in nonperforming loan recognition between the banks and the regulator, although these incidents have narrowed in recent years. Still, nancial transparency is pivotal for
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not managed well.
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.tchratings.com/esg
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RATING ACTIONS
| ENTITY/DEBT | RATING | PRIOR | ||
|---|---|---|---|---|
| IDBIBankLimited | LTIDR | BB+RatingOutlookNegative | Afrmed | BB+RatingOutlookNegative |
| LTIDR | WD | Withdrawn | BB+RatingOutlookNegative | |
| STIDR | B | Afrmed | B | |
| STIDR | WD | Withdrawn | B | |
| Viability | ccc+ | Afrmed | ccc+ | |
| Viability | WD | Withdrawn | ccc+ |
VIEW ADDITIONAL RATING DETAILS
FITCH RATINGS ANALYSTS
Tania Gold Senior Director Primary Rating Analyst +65 6796 7224 Fitch Ratings Singapore Pte Ltd. One Rafes Quay #22-11, South Tower Singapore 048583
Senior Director Secondary Rating Analyst
+91 22 4000 1741
Jonathan Cornish Managing Director Committee Chairperson +852 2263 9901
MEDIA CONTACTS
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Wai Lun Wan Hong Kong +852 2263 9935 [email protected]
Bindu Menon
Mumbai +91 22 4000 1727 [email protected]
Additional information is available on www.tchratings.com
APPLICABLE CRITERIA
Bank Rating Criteria (pub. 29 Feb 2020) (including rating assumption sensitivity)
ADDITIONAL DISCLOSURES
Dodd-Frank Rating Information Disclosure Form
Solicitation Status
Endorsement Policy
ENDORSEMENT STATUS
IDBI Bank Limited EU Endorsed, UK Endorsed
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SOLICITATION STATUS
The ratings above were solicited and assigned or maintained by Fitch at the request of the rated entity/issuer or a related third party. Any exceptions follow below.
ENDORSEMENT POLICY
Fitch's international credit ratings produced outside the EU or the UK, as the case may be, are endorsed for use by regulated entities within the EU or the UK, respectively, for regulatory purposes, pursuant to the terms of the EU CRA Regulation or the UK Credit Rating Agencies (Amendment etc.) (EU Exit) Regulations 2019, as the case may be. Fitch's approach to endorsement in the EU and the UK can be found on Fitch's Regulatory Affairs page on Fitch's website. The endorsement status of international credit ratings is provided within the entity summary page for each rated entity and in the transaction detail pages for structured nance transactions on the Fitch website. These disclosures are updated on a daily basis.
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