S&P affirms `BBB-' rating for 7 PSBs; lowers credit profile of SBI and UBI

Standard & Poor's Ratings Services has affirmed its 'BBB-' long-term and 'A-3' short-term issuer credit ratings for seven of the country's public sector banks, including the State Bank of India (SBI).

S&P said the outlook on the long-term ratings of all these banks is negative.

The banks include State Bank of India (BBB-/Negative/A-3), Bank of India (BBB-/Negative/A-3), IDBI Bank Ltd (foreign currency BBB-/Negative/A-3), Indian Overseas Bank (BBB-/Negative/A-3), Indian Bank (BBB-/Negative/A-3), Syndicate Bank (BBB-/Negative/A-3) and Union Bank of India (BBB-/Negative/A-3)

''We revised the stand-alone credit profile (SACP) of SBI to 'bbb-' from 'bbb' and that of UBI to 'bb+' from 'bbb-' based on our anticipation of the banks' weak asset quality performance. While we also anticipate that the asset quality of the other five banks could come under some stress, it is likely to be within our base-case expectation,'' S&P said.

S&D also kept the SACPs of five banks unchanged: Indian Bank at 'bbb'; BOI at 'bbb-'; and that of IDBI, IOB, and Syndicate Bank at 'bb+'.

S&P said its 'BBB-' issuer credit ratings on all the seven banks reflected expectation of extraordinary support from the government of India (unsolicited rating BBB-/Negative/A-3). However, the ratings on Indian Bank are constrained by the ratings on India because the bank's SACP is higher than the 'BBB-' sovereign rating.