IDBI Bank’s LT FCR and BSR Outlook Revised to Negative Following Change in Sovereign Risk Assessment

IDBI Bank’s LT FCR and BSR Outlook Revised to Negative Following Change in Sovereign Risk Assessment

Capital Intelligence Ratings (CI Ratings or CI ) today announced that it has revised the Outlook on the Long-Term Foreign Currency Rating (LT FCR) and Bank Standalone Rating (BSR) of IDBI Bank to Negative from Stable . This follows a change in CI R atings ’ in ternal assessment of the credit worthiness of the Indian sovereign , and reflects our expectation that India’s economy and public finances could deteriorate over the next 12 months due to the adverse financial impact of the coronavirus ( C ovid-19 ) pandemic. Moreover, a weaker operating environment could negatively impact the asset quality and profitability of the banking sector.

We forecast a slowing of GDP growth to 1.5% in FY21 (the financial year runs from 1 April 2020 to 31 March 2021 ) . S timulus measures, possibly lower tax revenues and a…