4 public sector banks rated ‘BBB-’

Fitch Ratings today affirmed the Long-Term Issuer Default Rating (IDR) of the country’s four largest public sector banks and a subsidiary bank at ‘BBB-.’ This affirmation is on a “high probability of extraordinary Government support if required given their high systemic importance.” However, it downgraded Canara Bank’s Viability Rating by one notch to ‘BB+’ due to higher risk concentration to the troubled infrastructure sector including State electricity boards and a weaker funding profile. The outlook on the IDRs of State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank and Bank of Baroda New Zealand is negative, which mirrors the country’s rating outlook, the agency said in a statement. According to the agency, the capitalisation of the banks is considered strong, backed by timely capital support from the Government and sound quality of capital.