Halister News

(Bloomberg) -- ICRA today cut ratings on UCO Bank’s lower tier 2 bonds to A+ from AA- and upper tier 2 notes to A- from A, the ratings company says in a statement on its website.

• Outlook on long-term rating of the lender is negative and could face challenges to meet increasing capital requirements under Basel III rules
• UCO’s weak operating and financial performance during last quarter and last fiscal year prompted the downgrade
• “Driven by consecutive years of losses during last two fiscals, and high levels of non-performing assets, the capitalization levels and solvency profile remain weak for the bank,” says ICRA in the note
  • “UCO has a large number of loans continuing to be classified as standard accounts. Hence the reported asset quality is likely to deteriorate further going forward:” ICRA note
• Despite equity raising of INR21.83b and issuing AT1 bonds of INR7.5b last fiscal year, the lender’s capital ratios remain weak with limited cushion to absorb future losses
• Tier 1 capital at 8.27% as on March 31 is marginally higher than the regulatory requirement of 8.25%
• ICRA expects the bank to need Tier 1 capital of INR30b-INR43b during this financial year and next, of which INR18b-INR30b has to be equity capital and balance AT1 bonds
• UCO’s distributable reserves have eroded significantly, thereby constraining the bank’s ability to raise AT1 capital; expects overall equity requirement to increase to meet Tier 1 capital need
• Ratings draws comfort from UCO’s majority sovereign ownership, and the lender’s healthy and stable deposits base
• Earlier story:
  • UCO Bank says RBI initiated prompt corrective action on bank

To contact the reporter on this story: Divya Patil in Mumbai at dpatil7@bloomberg.net To contact the editors responsible for this story: Neha D'silva at ndsilva1@bloomberg.net Ashutosh Joshi

--JOHN DEANE

--FERGAL O'BRIEN

(Bloomberg) -- Finnair rises as much as 3.6% to EU5.98, the highest since August 2008, after HSBC raises recommendation on stock to buy from hold.

• Volume on stock 43% of 3-month daily average as of 10:25am in Helsinki
• HSBC says Asia trading is much stronger than expected, also higher-yielding than North America
  • Analyst Achal Kumar also raises PT to EU6.50 from EU5.25
  • Sees strong 4Q Lapland demand, says comparison period was soft, hence yield “could rather be stronger than expected”
• NOTE: Finnish govt owns 55.8% of stock in Finnair; float is ~32%

To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net To contact the editors responsible for this story: Tasneem Hanfi Brögger at tbrogger@bloomberg.net Angela Cullen

(Bloomberg) -- Barclays Plc and four former executives were charged with conspiracy to commit fraud regarding the bank’s 2008 capital raising from Qatar, following a five-year investigation into one of the most turbulent periods in financial history.

• The Serious Fraud Office said Tuesday that former Chief Executive Officer John Varley, former chairman of investment banking for the Middle East Roger Jenkins, ex-deputy head of investment banking Richard Boath and ex-wealth chief Thomas Kalaris face charges along with the bank
• The case stems from 322 million pounds ($410 million) in fees Barclays paid Qatari investors for a loan as part of a wider 12 billion-pound fundraising during the 2008 financial crisis to avoid a state bailout

Link to Statement:Link