Overview

• S&P Global Ratings raised long-term issuer credit ratings for seven banks—State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Union Bank of India and Indian Bank—and three nonbank finance firms: Bajaj Finance, Tata Capital and L&T Finance.
• These upgrades followed S&P's sovereign rating bump to 'BBB' from 'BBB-' on August 14, marking its first change since 2006.
• The agency cited India's average GDP growth of 8.8% between FY22 and FY24 and an expected annual expansion of about 6.8% over the next three years as underpinning stronger credit profiles.
• Improved loan recovery under the 2016 Insolvency and Bankruptcy Code has strengthened asset quality, profitability and capitalisation prospects for Indian lenders.
• S&P also lifted ratings for state-owned and private firms like ONGC, Power Grid and NTPC and warned that fiscal slippage or a structural slowdown could stall further rating gains.