Fitch Ratings on Wednesday revised the rating outlook for nine banks in India, including SBI, ICICI Bank and Axis Bank, from negative to stable. Other lenders are Bank of Baroda (BOB), Bank of Baroda (New Zealand) Limited, Bank of India, Canara Bank, Punjab National Bank (PNB) and Union Bank of India.
“Fitch Ratings has stabilized the outlook on the long-term issuer default rating (IDR) of nine India-based banks from negative to negative, while reaffirming their IDRs,” Fitch said in a statement. The IDRs are based on Fitch’s assessment of the high to moderate likelihood of exceptional state support for these banks, taking into account the sovereign’s ability and propensity to provide exceptional support.
Fitch said this factors in the government’s consistent record of supporting systemically important banks, the relative systemic importance of lenders and their separate ownership. Separately, Fitch also revised the outlook for the Export-Import Bank of India (EXIM) long-term IDRs from negative to stable.
These rating actions follow a revision of Fitch’s approach to ‘BBB-‘ ratings. India Risks to the country’s medium-term growth eased from negative to stable last week, underscored by its rapid economic recovery and easing financial sector vulnerabilities.