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  Business   Companies  24 Jul 2017  Moody's rates 9 banks; downgrades IOB, CBI

Moody's rates 9 banks; downgrades IOB, CBI

PTI
Published : Jul 24, 2017, 7:52 pm IST
Updated : Jul 24, 2017, 7:52 pm IST

Moody's also downgraded IOB's Hong Kong branch's senior unsecured debt rating to Ba3 from Ba1.

Global rating agency Moody's on Monday affirmed ratings of nine banks.
 Global rating agency Moody's on Monday affirmed ratings of nine banks.

Mumbai: Global rating agency Moody's on Monday affirmed ratings of nine banks, including Bank of India, Punjab National Bank and Axis Bank, at Baa3/Prime-3, and downgraded the ratings of Indian Overseas Bank and Central Bank of India to Ba3 from Ba1.

Other banks whose rating was affirmed are Bank of Baroda, Canara Bank, Oriental Bank of Commerce, Syndicate Bank Union Bank of India and ICICI Bank. "We continue to position the rated public sector banks in the "very high" government support bucket, reflecting the systemic importance of public sector banks in the country," Moody's said in a report.

For Axis Bank and ICICI Bank, the agency expects the pace of bad loan formation to decline materially from the very high levels seen fiscal 2017, but to remain elevated.

"Both banks remain exposed to weak corporates that have not yet been classified as NPLs, thus representing a potential source of asset quality stress," the report said.

The agency also downgraded IOB's Hong Kong branch's senior unsecured debt rating to Ba3 from Ba1.

Moody's also downgraded the standalone credit profile, or the baseline credit assessment, of Syndicate Bank to Ba3 from Ba2, and as a result, downgraded its subordinated MTN and junior subordinated MTN programme ratings to (P)Ba3 and (P)B1 from (P)Ba2 and (P)Ba3, respectively.

It changed the outlook to stable from positive for BoB and its London branch, Canara and its London branch, PNB, and Syndicate and its London branch.

The rating firm changed the outlook to negative from positive for BoI and its London and Jersey branches, OBC, and Union Bank and its Hong Kong branch, and changed the outlook to stable from negative for IOB and its Hong Kong branch.

The rating agency used the joint default analysis model to determine government support for PSU banks. Under this model, it has placed each bank in a support bucket, which can be "very high", "high", "moderate", or "low".

Tags: moody's ratings, credit rating, indian overseas bank, central bank of india
Location: India, Maharashtra, Mumbai (Bombay)