BackFitch revises rating outlook on 9 banks, including SBI, ICICI Bank
The other lenders include – Axis Bank, Bank of Baroda (BOB), Bank of Baroda (New Zealand) Ltd, Bank of India, Canara Bank, Punjab National Bank (PNB) and Union Bank of India
PremiumFitch Ratings on Wednesday revised up its outlook for nine India-based banks, including SBI, ICICI Bank and Axis Bank, to stable from negative.
The other lenders include – Bank of Baroda (BOB), Bank of Baroda (New Zealand) Ltd, Bank of India, Canara Bank, Punjab National Bank (PNB) and Union Bank of India.
In a statement, Fitch said, "Fitch Ratings has revised the Outlook to Stable from Negative on the Long-Term Issuer Default Ratings (IDR) of 9 India-based banks, while affirming their IDRs."
The IDRs are based on Fitch's assessment of high to moderate probability of extraordinary state support for these banks, which takes into account its assessment of the sovereign's ability and propensity to provide extraordinary support.
It factors in the government's consistent record of supporting systemically important banks, the lenders' relative systemic importance and their different ownership, Fitch said.
Separately, Fitch also revised the outlook on Export-Import Bank of India's (EXIM) Long-Term IDR to stable from negative.
These rating actions follow Fitch's revision of the outlook on the 'BBB-' rating on India to stable from negative last week due to diminished downside risks to the country's medium-term growth, which is underscored by its rapid economic recovery and easing financial sector weaknesses.
"The Outlook revision reflects our view that downside risks to medium-term growth have diminished due to India's rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock," Fitch said in a statement on June 10.
"We expect robust growth relative to peers to support credit metrics in line with the current rating," the rating agency added.
Fitch expects India's GDP to grow by 7.8 percent in FY23 compared with its median forecast of 3.4 percent for countries it rateds BBB.
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