Fitch affirms Dena Bank

Fitch Ratings said it assigned a national short-term rating of F1+(ind) to Dena Bank's Rs. 5 billion certificates of deposits program and affirmed the bank's national long-term rating at A+(ind), individual rating at D/E, support rating at 4 and Rs.3 billion upper tier II bond issue at A(ind).

The outlook is stable.

The agency said there has been a significant improvement in the bank's reported asset quality ratios. This led to the upgrade of the bank's individual rating to D/E from E in October 2006. The short-term rating is supported by a healthy renewal of retail deposits, adequate access to the inter-bank money market and the holdings of government securities in excess of the regulatory minimum, the agency added.

However, Fitch said the bank's small size and higher net non-performing loans to equity ratio, when compared to other government banks, are factors to keep an eye on.

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