Rating Release
Agusto & Co. upgrades Polaris Bank Limited’s rating to ‘Bbb-’, with a stable outlook
The rating expires on 30 June 2024.
Agusto & Co. hereby upgrades Polaris Bank Limited’s (“Polaris Bank” or “the Bank”) rating to “Bbb-”. The upgrade is upheld by improving asset quality, which involved resolving significant impaired assets and recoveries. The rating also reflects adequate capitalisation, the new shareholders’ capacity and intent to transform the Bank, and a strong retail funding base. However, the rating assigned is constrained by prevailing macroeconomic headwinds as well as a significant loss of market share due to the governance issues that the Bank contended with in the past. We have also assigned a “3” ESG score, reflecting our view that environmental, social and governance issues have a material contribution to the Bank’s credit rating.
