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

State Bank of India’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 State Bank of India (SBI) to Negative from Stable . This follows a change in CI Ratings’ 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 ( Covid-19 ) pandemic. Moreover, a weaker operating environment could negatively impact the asset quality and profitability of the banking sector. Since SBI’s LT FCR is closely aligned with sovereign risk , any change in our internal assessment of sovereign credit risk for India w ould also impact the…