Select PSU bank shares fall on Moody's downgrade

Syndicate Bank, Indian Overseas Bank and Oriental Bank of Commerce are down 3-4% on BSE.

Shares of select public sector undertaking (PSU) banks have fallen up to 4% in early noon deals after global rating agency Moody’s downgraded its Standalone Bank Financial Strength Rating (BFSR) for three public sector banks on concerns of falling asset quality, pressure on profitability and capital generation.

The rating agency revised Indian Overseas Bank’s standalone rating from D to D- and revised the outlook from ‘stable’ to ‘negative’. However, it reaffirmed the Bank’s Baa3/Prime-3 foreign currency deposit ratings.

It cut Syndicate Bank’s BFSR to D from D+ and downgraded other instruments, including the local currency deposit rating, to Baa3/P-3 from Baa2/P-2 and the senior unsecured debt rating to Baa3.

For Oriental Bank of Commerce, the rating agency downgraded the standalone BFSR to D from D+. The global local currency deposit rating of OBC was cut to Baa3/P-3 from Baa2/P-2.The outlook on the bank deposit rating is stable.

Among the individual stocks, Syndicate Bank is down almost 4% at Rs 108 on BSE, while Indian Overseas Bank and Oriental Bank of Commerce are down by 3% each at Rs 64 and Rs 232 respectively.