Moody's concerns for capital were 'misplaced': SBI

Moody's concerns for capital were 'misplaced': SBI
State Bank of India (SBI) has said that its downgrade by Moody's Investors Services on Monday was uncalled for and that their concerns for capital were 'misplaced', reported PTI.

Earlier on Monday, On Monday, Moody's has lowered SBI senior unsecured debt and local currency deposit ratings to Baa3 from Baa2 and revised the outlook from stable to negative. The revised rating is at par with the India's foreign currency bond rating. The agency lowered rating on concerns regarding capitalization of bank, slowdown in the economy, stress in the bank's books.

Speaking to media, SBI's CFO, Arundhati Bhattacharya said, "They have displayed lot of concerns on capital which is misplaced. The bank has sufficient capital to meet the Basel III norms. As country's champion bank we should be in a better position to raise capital from government and market." SBI controls one-fifth of the loans and deposit market and government has a controlling stake of 63 per cent.

"If the economy is in stress it would impact the asset quality of the bank. But the bank is lending only to better rated and investment grade rated companies as a risk mitigation strategy," she said. The bank has sought Rs 4000 crore capital from government this year.

Dion Global Solutions Ltd.

Story first published: Wednesday, September 25, 2013, 9:10 [IST]
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