S&P Global Ratings has upgraded the long-term issuer credit ratings of seven major Indian banks — including SBI, HDFC Bank, ICICI Bank, and Axis Bank — and three non-banking finance companies — Bajaj Finance, Tata Capital, and L&T Finance — from “BBB-/Positive/A-3” to “BBB/Stable/A-2.”
The long-term issuer credit ratings on seven Indian banks — State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Union Bank of India, Indian Bank, and Kotak Mahindra Bank, and three finance companies – Bajaj Finance, Tata Capital and L&T Finance, has been raised by S&P Global Ratings following similar action on the sovereign credit rating on India.
The ratings of the 10 aforementioned financial institutions have been upgraded from “BBB-/Positive/A-3” to “BBB/Stable/A-2”.
S&P Global Ratings noted that India’s financial institutions will continue to benefit from the country’s strong economic growth momentum. These entities will benefit from their domestic focus and structural improvements in the system, such as in the recovery of bad loans.
The agency expects India’s banks to maintain adequate asset quality, good profitability, and enhanced capitalisation over the next 12-24 months. This is despite some pockets of stress.
A “BBB” rating implies an adequate capacity to meet financial commitments, but more susceptible to adverse financial conditions. A plus (+) or minus (-) sign shows relative standing within the major rating categories.
A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitment on the obligation is satisfactory.
A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
Sovereign link
The rating upgrade of financial institutions follows the rating agency’s revision of India’s rating after 18 years, upgrading it to ‘BBB/Stable/A-2’ from ‘BBB-/Positive/A-3’.
In this regard, the agency underscored that it expects India’s sound economic fundamentals to sustain growth momentum over the next two to three years. In addition, monetary policy settings have become increasingly conducive to managing inflationary expectations.
Along with raising the long-term issuer credit ratings of the 10 aforementioned financial institutions, S&P Global Ratings also revised upward its assessment of the stand-alone credit profiles (SACP) of seven of these entities – SBI, Axis Bank, Kotak Mahindra Bank, Union Bank of India, Indian Bank, Tata Capital and L&T Finance.
Published on August 15, 2025
