Moody’s Upgrades Credit Rating of Canara Bank, PNB & BOB

A good show in previous three quarters by Public Sector Bank has strengthen their rating also. The rating agency Moody’s has upgraded the Credit Rating of Canara Bank, PNB & Bank of Baroda to Baa3. The long-term local and foreign currency bank deposit ratings of these three banks upgraded to Baa3 from Ba1. The baseline credit assessments (BCAs) of these three banks were also upgraded to ba3 from b1. The outlooks on the long-term ratings of all these banks remain stable. The BCA upgrades of these banks reflect their improved asset quality and profitability. The Canara Bank has shown the YoY growth of more than 20% in the previous quarter and it improves the Credit Rating of Canara Bank.

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Public sector banks which were the best performers in 2022 as a group, could get a leg up with the rating upgrade as well even as the loans given to small and medium-size enterprises continue to pose risks to the banks’ otherwise improving asset quality.

The upgrade of BoB’s, Canara’s and PNB’s long-term deposit ratings to Baa3 from Ba1 reflect an improvement in India’s macro profile to “Moderate+” from “Moderate”, the improving credit metrics of the four banks and an assumption of a very high level of government support to the banks in times of need,” the rating company said.