Moody's downgrades ratings of SBI, HDFC Bank


Mumbai, June 2 (IANS): Moody's Investor Services has downgraded the long-term local and foreign currency deposit ratings of State Bank of India, HDFC Bank to Baa3 from Baa2, maintaining their outlook as negative.

It has also downgraded IndusInd's long-term local and foreign currency deposit ratings to Ba1 from Baa3 and its BCA to ba2 from ba1 and the rating outlook is negative.

The downgrade comes a day after the rating agency downgraded India's sovereign rating.

Moody's has primarily attributed the downgrade to the economic disruption caused by the coronavirus outbreak and the downgrade of the sovereign rating.

The ratings agency has also downgraded the long-term issuer rating of EXIM India to Baa3 from Baa2, keeping its outlook negative, said a Moody's statement.

Consequently, Moody's has downgraded HDFC Bank's Baseline Credit Assessment (BCA) to baa3 from baa2.

The deposit ratings of these banks are at the same level as India's Baa3 sovereign rating.

Moody's has placed the Baa3 long-term local and foreign currency deposit ratings of Bank of Baroda, Bank of India, Canara Bank and Union Bank of India and their ba3 BCAs under review for downgrade.

It has affirmed Punjab National Bank's long-term local and foreign currency deposit ratings at Ba1 and its BCA at b1. The rating outlook of PNB has been changed to stable from positive.

In the case of Central Bank of India and Indian Overseas Bank, Moody's has affirmed their long-term local and foreign currency deposit ratings at Ba2 and their BCAs at b2. The rating outlook of these issuers is maintained as stable.

"The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, volatile oil prices, and asset price declines are creating a severe and extensive credit shock across many sectors, regions and markets," it said.

According to the rating agency, the Indian banking sector has been affected given the disruption to India's economic activity from the coronavirus outbreak, which is weakening borrowers' credit profiles.

  

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Comment on this article

  • Alwin, Mangalore

    Tue, Jun 02 2020

    The poverty under education and caste ridden society will know Indira modi and not moody.we are concerned with shelter food and clothing on daily basis and not GDP

    DisAgree [6] Agree [5] Reply Report Abuse

  • j.anata, Mangaluru / Bengaluru

    Tue, Jun 02 2020

    Moody belongs to the US of A which is in worst turmoil & crisis than us at India, so I think we should gauge Moody as a low level trouble monger & ignore.

    DisAgree [13] Agree [5] Reply Report Abuse

  • Jossey Saldanha, Mumbai

    Tue, Jun 02 2020

    I wonder if Moody is an enemy of India ...

    DisAgree [8] Agree [6] Reply Report Abuse

  • Veer, Nagpur

    Tue, Jun 02 2020

    Even if it is end of the world with all the nations of the world including India destroyed Modi's rating never comes down. That is the limit of blindness of Bhakths.

    DisAgree [4] Agree [21] Reply Report Abuse

  • Sanjeev Kamath, Udupi

    Tue, Jun 02 2020

    Nagpurwale Veer Miya, are you aware that all the international banks will continue to have the same unhindered and unimpaired lending/borrowing limits & FX limits despite the transitory downgrade?

    They know the inherent strength of SBI & HDFC Bank, without which they will be thoroughly handicapped in the international markets from tomorrow!!

    If certain fixed assets of the SBI are marked to market from the present Rs 1.00 each, the balance would run into googols of googol, Miya.

    That is the power of Bhakths, Miya and that is the way Modiji runs them, though sadly, you are happy about it!!

    DisAgree [11] Agree [6] Reply Report Abuse

  • Veer, Nagpur

    Tue, Jun 02 2020

    Was state of our banks any good before the pandemic???. NO. Merger of banks before the pandemic is the sign of weaker economy ahead. Numerous businessmen went on losses and ran out of the country and BJP took timely advantage of it. So, our economy was in downward train before the pandemic and now once the economy opens same trend will continue but with grave consequences. Accept your failure and also accept you don't have solution to this important problem. Just fooling people and dragging opposition's name for your every problem doesn't solve this issue.

    DisAgree [3] Agree [15] Reply Report Abuse


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