The banks tagged as stable include State Bank of India, HDFC Bank, ICICI bank, IDBI Bank, along with six others. The rating affirmation came after applying new ratings criteria for banks, Standard & Poor's said in a statement. The ratings have been retained at BBB- with the outlook at stable.
Interestingly, the development came after Moody's had lowered its outlook for India's banking system to negative from stable, last month, citing concerns of rising bad loans and falling profitability.
According to S&P, on the whole Indian banks are expected to benefit from good economic growth prospects in the country. The growth in business is expected to enable the banks maintain sound financial health. The logic seems to be sound too at this time. India's inflation has started easing, finally and RBI is expected to remain calm over interest rates now. Moreover, some big policy reforms like FDI in retail, if gets through, would be big hit for Indian banks.
Indian Bank's high standalone credit profile reflects its superior funding and liquidity position and it is the only public sector bank with an adequate capital position," said Geeta Chugh, director, Standard & Poor's.
Cheering the news, banking stocks were reacting strong on bourses, as SBI traded at Rs 1,823.50 (up 0.23%), ICICI Bank at Rs 773.60 (up 1.46%), HDFC Bank at Rs 459.70 (up 1.38%) on BSE at 10:57 AM.
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