Credit Rating Affirmation
SBI’s Moody’s Ratings Affirmed at Baa3 with Stable Outlook; Credit Profile Remains Strong
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State Bank of India (SBI) has informed the stock exchanges that Moody’s Ratings has affirmed its long-term deposit ratings at Baa3 along with its Baseline Credit Assessment (BCA) and Adjusted BCA at baa3. Moody’s has maintained a Stable Outlook, citing SBI’s strong domestic franchise, stable asset quality, healthy funding profile, and improved capital position.
PRICE-SENSITIVE TRIGGER
Event: Moody’s Ratings affirms SBI’s long-term deposit ratings and baseline credit assessment.
Type: Credit Rating Affirmation
Impact: Positive
Immediate Effect: The reaffirmation of SBI’s investment-grade ratings with a Stable Outlook reinforces confidence in the bank’s financial strength, funding profile, and credit quality while supporting its access to domestic and international funding markets.
Financials:
Metrics:
- Long-Term Deposit Rating: Baa3 (Affirmed)
- Baseline Credit Assessment (BCA): baa3 (Affirmed)
- Adjusted BCA: baa3 (Affirmed)
- Outlook: Stable
- Net Income / Tangible Assets (FY2026): 1.1%
- Tangible Common Equity / Risk-Weighted Assets: 12.7% (March 2026) vs. 11.2% a year earlier
- Capital Raised (FY2026): ₹25,000 crore (INR250 billion)
- Loan-to-Deposit Ratio: 82.4%
- High Quality Liquid Assets (HQLA): 17.9% of tangible banking assets
- Liquidity Coverage Ratio (LCR): 124.3%
- Government Shareholding: 55.0% (March 2026)
Highlight:
- Moody’s reaffirmed SBI’s Baa3 long-term deposit rating with a Stable Outlook, supported by stronger capitalisation, stable asset quality, robust liquidity, and its dominant banking franchise.
What Happened ?
State Bank of India informed the exchanges that Moody’s Ratings has reaffirmed the bank’s Baa3 long-term deposit ratings, baa3 Baseline Credit Assessment, and Adjusted BCA, while maintaining a Stable Outlook.
Moody’s highlighted SBI’s diversified lending portfolio, strong retail deposit franchise, healthy profitability, improving capital buffers, and continued government support as the key reasons behind the affirmation.
key details
Moody’s Rating Rationale:
- Moody’s reaffirmed SBI’s long-term deposit ratings at Baa3.
- Baseline Credit Assessment (BCA) and Adjusted BCA were reaffirmed at baa3.
- Outlook remains Stable.
- SBI continues to benefit from India’s largest banking franchise with approximately 23% deposit market share.
- Stable retail deposits continue to provide a strong and low-cost funding base.
- Asset quality remains resilient despite expectations of modest moderation in agriculture and MSME portfolios.
- Profitability remains supported by stable net interest margins, diversified fee income, and low credit costs.
- Capital adequacy strengthened following a ₹25,000 crore capital raise during FY2026.
- Liquidity remains strong with an LCR of 124.3%, comfortably above regulatory requirements.
- Moody’s continues to factor in a very high probability of government support, supported by the Government of India’s 55% ownership stake.
Note:
- Moody’s stated that SBI’s ratings are currently aligned with India’s sovereign rating, limiting the possibility of an upgrade unless the sovereign rating itself improves.
Risk Analysis
Summary:
- While the rating affirmation reflects SBI’s strong financial profile, Moody’s expects modest moderation in profitability and credit quality over the next 12–18 months due to lower treasury income, higher credit costs, and slower performance in select lending segments.
Key Risks:
- Lower treasury-related non-interest income may moderate profitability.
- Credit costs are expected to rise from historically low levels.
- Agriculture and MSME portfolios may experience some asset quality moderation.
- Any downgrade in India’s sovereign rating could directly affect SBI’s ratings.
- Capital ratios falling below Moody’s thresholds could pressure future ratings.
Worst Case:
- A downgrade of India’s sovereign rating or a material deterioration in SBI’s capital strength, profitability, or asset quality could lead to a downgrade of the bank’s credit ratings.
Risk Level: Low
Company Commentary
- Moody’s Investor Service has affirmed SBI’s Baa3 long-term deposit ratings.
- Baseline Credit Assessment (BCA) and Adjusted BCA remain at baa3.
- Stable Outlook has been maintained across applicable ratings.
- SBI disclosed the rating affirmation under Regulation 30 of the SEBI (LODR) Regulations.
Official Exchange Filing: State Bank of India Limited
