CARE Rating has re-affirmed the 'A1+' rating on the Rs 350 billion (enhanced from Rs 250 billion) certificate of deposit programme of Andhra Bank.

The rating continues to factor in the capital support and majority ownership of the Government of India (GoI) in Andhra Bank, healthy growth in deposits and advances, and comfortable capitalization levels.

However, the rating also factors in the deterioration in asset quality as indicated by sharp increase in non-performing assets (NPA), and restructured assets, necessitating higher provisioning and resultant strain on profitability.

Continued ownership and support by the GoI, ability of the bank to improve asset quality, maintain spreads, sustain growth in business, increase share of current and savings account (CASA) deposits and fee income, are the key rating sensitivities.

Shares of the company declined Rs 2.15, or 2.20%, to settle at Rs 95.60. The total volume of shares traded was 346,283 at the BSE (Friday).