Moody's maintains stable outlook on three Indian PSU banks ratings - Hindustan Times
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Moody's maintains stable outlook on three Indian PSU banks ratings

By | Edited by Abhyjith K. Ashokan
Jun 09, 2024 06:21 PM IST

Moody's maintains stable outlook on three PSU banks including Bank of Baroda (BOB), Canara Bank, and Punjab National Bank (PNB).

Credit ratings and research giant, Moody's on Friday, affirmed the Baa3 ratings on three Indian public sector banks including Bank of Baroda (BOB), Canara Bank, and Punjab National Bank (PNB), ANI reported.

A Moody's sign is displayed on 7 World Trade Center, the company's corporate headquarters in New York.(Reuters)
A Moody's sign is displayed on 7 World Trade Center, the company's corporate headquarters in New York.(Reuters)

The rating agency maintained A stable outlook on the long-term ratings of all three banks.

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The ratings agency said in its press release that it was because of the three banks' improved credit metrics.

Also Read | PM Modi's smaller mandate to slow India's fiscal tightening, Moody's says

The banks' non-performing loan (NPL) ratios have also declined. It is a ratio of bad or unpaid loans to total loans.

"Although their rapid growth of unsecured retail loans will pose risks to their asset quality, such loans represent a small share of their total loans. The banks have also built adequate loan loss reserves to buffer against future credit losses," the rating agency said.

BOB's, Canara's and PNB's NPL ratios respectively declined to 2.9 per cent, 4.2 per cent and 5.7 per cent as of 31 March 2024 from 3.8 per cent, 5.4 per cent and 8.7 per cent a year earlier, supported by lower bad loans (or slippage) as well as stronger recoveries and higher write-offs.

Also Read | India assessing need for more measures to slow unsecured lending, cenbank chief says

"The banks' strong liquidity buffers and low reliance on market funds support their funding," Moody's said.

Moody's also believes that India's strong operating environment will continue to support their credit fundamentals over the next 12-18 months, the ANI report read.

Also Read | India's fiscal consolidation likely to become challenging with coalition government: Fitch

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