Capital Intelligence affirms the Export Import Bank of India’s ratings
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Export Import Bank of India’s (Exim Bank) foreign currency ratings at BBB- long-term and A3 short-term.
The ratings, which are constrained by the sovereign rating ceiling, reflect the Bank’s 100% government
ownership, capable management and good financials overall. The support rating is maintained at 2 and
reflects the strong likelihood that the Bank’s sole shareholder would provide support in case of need. CI
also affirms the Bank’s BBB financial strength rating. A ‘Stable’ outlook has been assigned to all the
The Bank’s operating profitability and return on average assets strengthened in FY2009 on the back of an
improved net interest differential and good credit growth. Asset quality ratios continue to be strong with
non-performing loans at a low level and a high specific provision coverage ratio. Although restructured
loans have increased substantially in the context of the challenging operating environment over the last
two quarters of FY2009 and the weak performance of the export sector, these remain at acceptable
levels. The high level of general provisions maintained by the Bank is also a mitigating factor. The Bank’s
relatively large free capital base (strengthened by a capital infusion this year) provides further cover.
Funding, while primarily wholesale in nature, is diversified to the extent possible in terms of counterparties,
tenors and instruments. Since the Bank is perceived as a sovereign entity and has a good reputation, the
availability of local currency funding is not in doubt. However, raising competitively priced long-term
foreign currency resources is more difficult in the present market circumstances. The central bank has
supported the Bank with a substantial US dollar denominated swap facility as well as a large local
currency line of credit. While the operating environment remains challenging, India’s GDP is showing
signs of recovery in FY2010.
Exim Bank was established in 1981 to finance and promote India's foreign trade. It is fully owned by the
government of India. The Bank has ten domestic offices and six foreign offices. Exim Bank provides
financial assistance to domestic exporters and importers. It assists exporters through all stages of their
business cycle, from finding overseas markets to providing guarantees, manufacturing loans and postshipment
finance. It provides lines of credit to banks in more than 90 countries for financing exports from
India. The Bank also offers consultancy and underwriting services as well as import finance. It facilitates
and finances acquisitions and the setting up of subsidiaries and joint ventures overseas by Indian
companies. The Bank benefits from well established relationships with international funding agencies.
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- For 1H 2005-06, India recorded a current account deficit of US$12.96bn.
- Total exports of Bahrain in 2004 stood at BD2.83bn, an increase of 13.4% over 2003