Fitch Ratings upgraded nine Indian institutions, including SBI, ICICI Bank, and Axis Bank, from negative to stable. Bank of Baroda (BOB), Bank of Baroda (New Zealand) Ltd, Bank of India, Canara Bank, Punjab National Bank (PNB), and Union Bank of India are among the other institutions to get a upgrade. Fitch Ratings has upgraded 9 India-based banks’ Long-Term Issuer Default Ratings (IDRs) to Stable from Negative, while upholding their IDRs.
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KEY POINTS:
- The IDRs are based on Fitch’s evaluation of the sovereign’s ability and tendency to offer extraordinary support for these institutions, which takes into account Fitch’s assessment of the sovereign’s ability and inclination.
- It takes into account the government’s track record of backing systemically important banks, the lenders’ relative systemic importance, and their various ownership structures.
- Fitch also changed the outlook on the Export-Import Bank of India’s (EXIM) Long-Term IDR from negative to stable.
- These steps come after Fitch changed the outlook on India’s ‘BBB-‘ rating from negative to stable last week, citing reduced downside risks to the country’s medium-term growth, as evidenced by its rapid economic recovery and lessening financial sector problems.
- India’s GDP is expected to expand 7.8% in FY23, according to Fitch, compared to a median prediction of 3.4 percent for nations rated BBB.