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Fitch cuts viability ratings
June 21 , 2018
2140 days
857
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- Rating agency Fitch has downgraded the viability ratings (VRs) of State Bank of India (SBI) and Bank of Baroda (BoB).
- Fitch downgraded the VRs of SBI and BoB by one-notch to ‘BB+’ and ‘BB’, respectively.
- It cited the lenders’ weakened risk profile due to poor asset quality and the vulnerability of their capital buffers to moderate shocks.
- As many as 19 of India’s 21 state banks reported losses in the last fiscal, cumulatively wiping out almost all of the government’s $ 13 billion capital injections during the year.
- Fitch, which has a negative sector outlook on Indian banks, however, affirmed the ‘BBB’ Long-Term Issuer Default Ratings (IDRs) of SBI, BoB, Canara Bank and Bank of India (BoI) with a stable outlook.
BBB rating
- A BBB rating reflects an opinion that the issuer has the current capacity to meet its debt obligations but faces more solvency risk than an A-rated issue and less than a BB-rated issue if business, financial, or economic conditions change measurably.
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