Moody’s has downgraded stand-alone rating of State Bank of India, to D+ from C-. The downgrade of the PSU bank’s financial strength rating from the global credit rating agency has come just ahead of the second quarter results on the back of its weakening asset quality.
A statement from Moody’s says:
“Moody’s Investors Service has downgraded the State Bank of India’s (SBI) bank financial strength rating (BFSR), or stand-alone rating, to D+ from C-. The revised rating maps to a baseline credit assessment (BCA) of Baa3. As a result of the lower BCA, the Hybrid debt rating was downgraded to Ba3(hyb) from Ba2(hyb).”
SBI shares hit a 52-week low on the bourses, plunging more than 5%, on the fears that its non-performing assets are likely to surge further amid rising interest rates. The bank’s NPA, as of June 30, stood at 3.52% of loans.