Moody's Investor Services has downgraded the financial strength rating (BFSR) of the State Bank of India (SBI), the country's largest lender, to `D+' from `C-' on concerns over its deriorating capital base and rising bad loans or non-performing assets (NPAs).
SBI also reported a 46-per cent fall in its net profits at Rs1,584 crore for the fiscal first quarter ended 30 June 2011, against a net profit of Rs2,914 crore in the first quarter of the previous financial year.
The sharp fall comes against a 32-per cent increase in SBI's net interest income (NII) to Rs9,700 crore (Rs7,304 crore) and an 18 per cent increase in operating profit at Rs7,242 crore (Rs6,134 crore).
SBI's net interest margin (NIM) stood at 3.62 per cent, against 3.18 per cent in the previous year quarter.
SBI's profit has been dented by higher provisioning for non-performing assets (NPAs) and depreciation on investments.
The revised rating pushes the bank's baseline credit assessment (BCA) to Baa3.