CRISIL has assigned its 'AA+/Negative' rating to the Rs 5 billion Tier-II bonds (under Basel III) of Allahabad Bank, and has reaffirmed its ratings on the bank's existing debt instruments at 'AA+/AA/Negative'.

The ratings continue to factor in the expected strong support that Allahabad Bank is likely to receive from its majority owner, Government of India (GoI). The rating also reflects the bank's adequate capitalisation and resource profile. These rating strengths are partially offset by the bank's modest asset quality and earnings profile.

CRISIL believes that while Allahabad Bank will continue to benefit from strong GoI support and will maintain adequate capitalisation over the medium term. The 'Negative' outlook reflects the continued pressure on the bank's asset quality and earnings profile. The ratings may be downgraded in case of significant deterioration in its asset quality or earnings profile. Conversely, the outlook may be revised to 'Stable' in case of a substantial and sustained improvement in Allahabad Bank's asset quality and earnings profile. 

Shares of the company declined Rs 2.2, or 1.68%, to settle  at  Rs 129.  The total volume of shares traded  was  682,068 at  the BSE (Thursday).