The Hindu Business Line : S&P outlook for 5 banks positive

"The outlook revision on these bank ratings reflects their improving standalone profiles against the backdrop of a better operating environment. The banks' standalone profiles are also expected to be partially strengthened by the better quality in their asset books, given the government bonds they hold.''

Mumbai , April 19

Standard & Poor's Ratings Services (S&P) has revised outlook on five domestic banks to positive from stable. The five banks for which the outlook has been revised are State Bank of India (SBI), ICICI Bank Ltd, Industrial Development Bank of India (IDBI), Bank of India (BOI) and Indian Overseas Bank (IOB).

S&P has also revised the long-term foreign currency rating on IDBI to `BB+' from `BB' and reaffirmed the short-term ratings at `B'. The rating service has affirmed the `BB+/B' counter-party credit ratings on the other four banks.

According to a press release from S&P, the outlook revision for the five banks follows the similar revision in outlook on the sovereign credit ratings on India (BB+/Positive/B) on Wednesday.

A release from S&P said that the `BB+' long-term foreign currency rating on IDBI factors in the expected extraordinary support from the government, if the bank faces distress.

"The government's dealings with IDBI since its October 2004 restructuring have indicated the government remains committed to having IDBI play a quasi-policy role in long-term development projects. IDBI has demonstrated, although with government assistance, that it has been able to build a sustainable commercial franchise after the restructuring," said the release.

S&P expects IDBI to continue its improvement trajectory in the medium term.