Banks stocks in focus after Crisil downgrades

Banks stocks in focus after Crisil downgrades

8 PSBs Ratings agency Crisil has downgraded its ratings on debt instruments of eight public sector banks (PSBs). It has revised its outlook on five others to 'negative' from 'stable'.

Crisil downgraded Bank bonds: Ratings agency Crisil has downgraded its ratings on debt instruments of eight public sector banks (PSBs). 

It has revised its outlook on five others to 'negative' from 'stable'. 

This is in addition to another rating downgrade and an outlook revision to 'Negative' on two public sector banks (PSBs) over the past month. 

The eight downgraded banks are Andhra Bank , Bank of Baroda , Bank of India , Canara Bank , Central Bank of India , Corporation Bank , Dena Bank and IDBI Bank . 

"These actions are driven by the expectation that the asset quality problems being faced by PSBs will remain acute and continue through most of the next fiscal. 

The resultant impact on profitability and capitalisation can further dent the credit profiles over the medium term," Crisil said in a press release. 

The ratings agency expects weak assets to rise to Rs 7.1 lakh crore by March 2017 from Rs 4 lakh crore on March 2015. 

It also said, weak assets will rise to 11.3 percent of total loan book by March 2017 from 7.2 percent in March 2015. Crisil also believes slippages to NPAs is likely to remain high driven by stretched cash flows of highly-leveraged corporates.

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Source:Moneycontrol.com