S&P Upgrades Ratings For Four Institutions, Says Financial Sector Is Strongly Recovering
On Tuesday, S&P Global Ratings upgraded four financial institutions, including Union Bank of India and Bajaj Finance, and said that the Indian financial industry is in the midst of a robust recovery.
The decision reflects S&P’s belief that domestic financial institutions in India would keep raising the quality of their assets thanks to strong economic prospects and structural changes in the business environment.
Today, S&P Global Ratings upgraded Shriram Finance, Bajaj Finance, Hero FinCorp, and Union Bank of India. The Indian banking industry is seeing a significant revival, according to S&P.
S&P anticipates that the financial institutions in India, particularly the public sector banks, would maintain their increased capital positions.
Although margins could decrease as banks reprice deposits, bank profitability will likely be similar to those of peers in other developing markets. Despite pressure from the growing cost of financing, S&P expects robust profitability for its rated non-bank finance firms.
The poor loans ratio in the banking sector will keep getting better, according to the US-based rating agency. According to the statement, the ratio, which was around 5.2% of total loans as of March 31, 2023, is anticipated to fall to 3-3.5% by that date.
The agency upgraded the issue rating on some of these organisations’ debt while maintaining its ratings for the other rated financial institutions.
