Fitch Cuts Outlook To Negative For Eight Banks, Including ICICI Bank Ltd-Business Line

Business Line reported that Fitch Ratings revised the outlook on eight banks and three financial institutions to ‘negative’ from ‘stable’, while affirming the rating. Fitch said there could be further pressure on banks’ future asset quality, given India’s weakening economic and fiscal outlook, slowing business reforms and inflationary pressures. The revision on the ‘BBB-’ Long-Term (LT) Foreign Currency (FC) Issuer Default Rating (IDR) of India-based financial institutions includes six public sector banks, State Bank of India, Punjab National Bank, Bank of Baroda, Canara Bank Ltd, Export-Import Bank of India (EXIM), and a foreign subsidiary of Bank of Baroda (New Zealand). The revision in outlook also includes two private sector lenders, ICICI Bank Ltd and Axis Bank Ltd. The agency also revised its outlook on Infrastructure Development Fin Co Ltd (IDFC) and two wholly-owned Government institutions, Housing and Urban Development Corporation Ltd and Indian Railway Finance Corporation Ltd. Fitch withdrew the ‘BBB-(exp)’ rating for IRFC as it reduced its plan size of $300-million bond proposed in FY12. The revision follows the downgrade of outlook for India by the same agency from ‘stable’ to ‘negative’ on Monday.