Global ratings agency Fitch on Monday revised the ratings of 9 Indian Banks to negative from stable due to the impact of the escalating coronavirus pandemic on the Indian economy.

These banks include the country’s largest lender State Bank of India, ICICI Bank, Axis Bank, Bank of Baroda, Punjab National Bank among others.

These rating actions follow Fitch’s revision of the outlook on the BBB- rating on India to negative from stable on June 18.

“The negative outlook on India’s sovereign rating reflects an increasing strain on the state’s ability to provide extraordinary support, due to the sovereign’s limited fiscal space and the significant deterioration in fiscal metrics due to the challenges from the COVID-19 pandemic,” Fitch ratings said in a press statement.

On individual banks, the rating agency stated that it’s ratings on SBI reflects that it would likely receive extraordinary state support if required due to its very high systemic importance.

SBI is the largest Indian bank with nearly 25% market share in system assets and deposits, it is 57.9% state-owned and has a much broader policy role than peers.

The issuer default ratings (IDR) were assessed at BB+, lower than the sovereign ratings on expectations of a moderate probability of extraordinary state-support for these banks.

Fitch also affirmed IDBI Bank’s IDR at BB+ while maintaining the outlook at negative.







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