Moody's lowers credit outlook of PNB, BoB, Canara Bank
Credit ratings agency Moody's lowered the rating outlook of Punjab National Bank, Bank of Baroda and Canara Bank from stable to negative on account of rising bad loans.
December 14, 2012 / 08:49 IST
Credit ratings agency Moody's lowered the rating outlook of Punjab National Bank, Bank of Baroda and Canara Bank from stable to negative on account of rising bad loans. "These Indian banks are particularly challenged by the prevailing operating environment, characterised by high inflation and high interest rates," Moody's said in a statement.
Also Read: Banks to remain stressed next year too: FitchThe revision in rating outlook, it said, "reflects the increased risk posed by current trends in asset quality, with continuing rise in gross non-performing loans and restructured loans pressuring profits and capital". The prevailing economic conditions will reduce the repayment ability of some corporate borrowers and impact the banks, it said."Moody's analysis takes into account these bank's comparatively low provisioning, exposing their capital buffers to the risk of erosion in the event that those difficult conditions persist," the statement added. The agency, however, has kept the foreign currency long term rating of the three PSU banks unchanged at 'Baa2' is a medium grade rating which reflects moderate credit risk. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
