Ratings agency Moody's has upgraded the long-term local and foreign currency bank deposit ratings of four PSU banks.
While the long-term rating for the State Bank of India was maintained at Baa3, the ratings for Bank of Baroda, Canara Bank, and Punjab National Bank were upgraded to Baa3 from Ba1.
While Ba1 is the highest rating of speculative grade Moody's Long-term Corporate Obligation Rating, Baa 3 is the lowest. Obligations rated Baa3 are subject to moderate credit risk. Obligations rated Ba1 are judged to have speculative elements and are subject to substantial credit risk.
Outlooks on the long-term ratings of all four banks remain stable.
During 2022, public sector banks reduced their bad loans and posted record profits, a trend which is likely to continue in 2023 also. Robust credit demand and high interest rate regime due to tight monetary conditions globally are also expected to help the profitability of the banks.
Also Read: MC Explainer | Can banks refuse to communicate in the local language to customers?
During H1 FY23, 12 public sector banks, which account for around 60 per cent market share in terms of total business, posted a 32 per cent rise in cumulative net profit at Rs 40,991 crore.
Not only this, banks have raised record Rs 91,500 crore in debt capital in FY23 so far. Gross bond issuances by banks are estimated to reach Rs 1.3-1.4 lakh crore this fiscal as debt sales have already hit record high of Rs 0.915 lakh crore, surpassing the previous high of Rs 0.8 lakh crore in FY17, ICRA Ratings said in a note earlier in January.
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!
