IOB recovers morning losses; S&P puts the bank on credit watch

NEW DELHI: Shares of Indian Overseas Bank recovered all of its losses to end the day higher by 0.21 per cent after declining 10 per cent, as credit rating agency Standard & Poor put the public lender on credit watch with negative implications. The bank’s ‘BB+’ long-term and ‘B’ short-term ratings have been under watch for further evaluation, S&P said.

Reacting to the development, the stock fell 9.24 per cent to hit a low of Rs 21.60 on the BSE.

"Our rating action reflects our expectation that IOB's mounting credit losses have strained its capitalization and make it more onerous for the bank to meet the minimum regulatory capital requirement by March 2016," said Standard & Poor's credit analyst Amit Pandey.