Fitch Ratings on Thursday affirmed the ratings of the nation's six public sector lenders, including State Bank of India (SBI) and Bank of Baroda (BoB), at BBB- with stable outlook.

The other banks which the agency rated BBB- with stable outlook are Punjab National Bank, Canara Bank, Bank of India, and Union Bank of India.

The rater has also affirmed these banks' viability rating at BB and its government support rating of BBB-.

On retaining the long-term issuer default rating of SBI, the agency said the rating is support-driven, with the government support rating (GSR) above the viability rating (VR). SBI's GSR is the same as the sovereign rating of BBB- with stable outlook, reflecting the agency's view that SBI 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 to BB+ from BB, the agency said it reflects the view of structural improvement since the onset of Covid pandemic.

The rating revision also reflects the agency's view of the bank's ability to generate business consistently through the cycle while managing risk better than its peers.

The agency also revised the outlook on SBI's asset quality score of BB- to positive, from stable, as it expects the four-year average impaired loans ratio to further improve over the near term.

Meanwhile, the rating agency also affirmed the long-term rating of the second largest state-owned lender Bank of Baroda and its New Zealand subsidiary BBB- with stable outlook.

In a statement issued from Singapore, the agency has affirmed the long-term issuer default ratings of BoB and its wholly-owned subsidiary Bank of Baroda New Zealand at BBB- along with retaining the stable outlook for both.

The agency has also affirmed the viability rating (VR) of the bank at BB- along with affirming the government support rating at BBB- and the shareholder support rating at BBB-.

Besides, Fitch also affirmed the ratings of Punjab National Bank, Canara Bank, Union Bank of India, Bank of India and its New Zealand subsidiary at BBB- with stable outlook along with retaining the viability rating at BB- and the government support rating at BBB-.

While retaining the BBB- rating on Punjab National Bank, the agency upgraded the viability rating to B+ even as it retained the outlook stable.

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