Standard & Poor's Revises Outlooks On Five Indian Banks To Positive; IDBI Rating Raised To 'BB+'
Standard & Poor's Ratings
Services on April 19, 2006, revised the outlooks on the following five Indian banks to positive from stable.
--State Bank of India (SBI);
-- ICICI Bank Ltd. (ICICI Bank);
-- Industrial Development Bank of India Ltd. (IDBI);
-- Bank of India (BoI); and
-- Indian Overseas Bank (IOB).
Standard & Poor's also raised the long-term foreign currency rating on
IDBI to 'BB+' from 'BB'. The short-term ratings are affirmed at 'B'.
At the same time, Standard & Poor's affirmed the 'BB+/B' counterparty
credit ratings on the other four banks--SBI, ICICI Bank, BoI, and IOB.
The outlook revision for the five banks follows the similar revision in
outlook on the sovereign credit ratings on India (BB+/Positive/B) on April 19,
"The outlook revision on these bank ratings reflects their improving
stand-alone profiles against the backdrop of a better operating environment,"
said Standard & Poor's credit analyst Nandini Vijayaraghavan. "The banks'
stand-alone profiles are also expected to be partially strengthened by the
better quality in their asset books, given the government bonds they hold,"
The 'BB+' long-term foreign currency rating on IDBI factors in the
expected extraordinary support from the government if the bank faces distress.
The government's dealings with IDBI since its October 2004 restructuring have
indicated the government remains committed to having IDBI play a quasi-policy
role in long-term development projects. IDBI has demonstrated, although with
government assistance, that it has been able to build a sustainable commercial
franchise after the restructuring. Standard & Poor's expects IDBI to continue
its improvement trajectory in the medium term.
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