Fitch has affirmed the ratings of six PSU lenders, including State Bank of India (SBI) and Bank of Baroda (BoB), at BBB- with stable outlook.

The other four banks which the international agency retained the ratings for are Punjab National Bank, Canara Bank, Bank of India, and Union Bank of India.

Fitch has also affirmed their viability rating at BB and its government support rating of BBB-.

‘BBB’ ratings indicate that expectations of default risk are currently low.

The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity

Commenting on the rationale for maintaining SBI’s ratings, Fitch said it is support-driven, and the agency has the view that the country’s largest bank has the highest probability of extraordinary state support among the banks. The stable outlook mirrors that on the sovereign’s own rating, it added.

Revising the operating environment score of the bank, the agency said it reflects the view of structural improvement since the onset of the Covid pandemic.

“The agency forecasts India to be one of the fastest-growing Fitch-rated sovereigns globally this fiscal year. Healthy business sentiment, resilient financial markets and the government’s capital spending can buffer global economic headwinds and inflation.

“Importantly, India also exhibits robust medium-term growth potential, supported by resilient investment prospects,” Fitch said.