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Covid-19 impact: Moody's lowers SBI's baseline credit assessment to 'ba2'

The rating agency, however, affirmed SBI's Baa3 deposit ratings


Moody's has maintained SBI's rating outlook, where applicable, as negative, in line with the outlook on India's sovereign rating

Abhijit Lele Mumbai
Rating agency Moody’s has downgraded State Bank of India’s (SBI’s) baseline credit assessment (BCA) from “ba1” to “ba2” as economic shock from the Covid-19 pandemic may aggravate the weakening borrowers’ credit profiles. It would hurt asset quality of India banks. The agency affirmed SBI’s Baa3 deposit ratings.

The downgrading reflects that bank’s asset quality and profitability will deteriorate. The resultant weakening in internal capital generation will reverse improvements in its financial metrics achieved over the past two years.

SBI’s bad loan ratio was potentially understated as it does not capture loans on which the bank has granted payment deferrals. 

Also, its common equity

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First Published: Aug 25 2020 | 7:52 PM IST

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