Fitch Ratings remains unchanged for Prominent Indian Public Sector Banks | blinkX News

Fitch Ratings, a credit rating agency, has decided to keep the credit ratings of six major public sector banks in India unchanged. These banks include well-known names like State Bank of India (SBI), Bank of Baroda (BoB), Punjab National Bank, Canara Bank, Bank of India, and Union Bank of India. The agency has given them a rating of BBB- with a stable outlook, which suggests that the agency believes these banks have a moderate level of creditworthiness and are likely to maintain their financial stability in the near future.

Fitch also confirmed two important ratings for these banks: the viability rating (VR) and the government support rating (GSR). The viability rating assesses the intrinsic strength of a bank, while the government support rating gauges the potential support a bank could receive from the government in times of financial stress.

For the State Bank of India (SBI), Fitch's decision is based on the fact that the government's potential support for the bank is higher than its standalone financial strength. This means that the government is likely to provide assistance to SBI if needed due to its significant role in the Indian banking system. The stable outlook aligns with the stable outlook of the Indian government's credit rating, which indicates that SBI has a strong chance of receiving support from the government if required.

Fitch has also recognized the State Bank of India's improved performance since the COVID-19 pandemic began. The agency upgraded its operating environment score, acknowledging SBI's ability to conduct business well and manage risks effectively. This positive assessment also extends to the bank's asset quality, indicating that its loans and investments are relatively stable.

Bank of Baroda and its subsidiary in New Zealand also maintained their ratings of BBB- with a stable outlook. Fitch kept their viability rating and government support rating the same as well. Similar decisions were made for the other banks mentioned, including Punjab National Bank, Canara Bank, Union Bank of India, and Bank of India. This shows that Fitch believes these banks are capable of handling challenges and maintaining their financial strength.

Source: Media Reports