Moody’s Investor Service on Wednesday downgraded its outlook for Bank of India’s (BoI) debt programmes by a notch due to rapid deterioration of asset quality and mounting pressure on profitability among other reasons.
Moody’s said that slowing economic growth in India, high interest rates and inflation will continue to have an adverse impact on the repayment capacity of the bank’s corporate borrowers.
“It will be difficult for BoI to significantly improve its relatively weak asset quality over the next 12-18 months,” Moody’s said.
In October last year, Moody’s had downgraded its outlook for the State Bank of India.
“The Indian banking industry in recent times has seen pressure on asset quality, profitability and capital adequacy, which need to be addressed,” Rohit Bammi, partner, advisory, KPMG told Hindustan Times.
BoI has a high exposure to Indian government securities.