S&P assigns 'BB' to SBI, Tata Motors

Standard & Poor's Ratings Services on Wednesday assigned its 'BB' long-term foreign currency counterparty credit ratings to State Bank of India (SBI) with a stable outlook. The rating remains constrained by sovereign ratings of India, the agency said.

S&P has also assigned the same rating to the $400 million senior unsecured convertible notes issued by Tata Motors with a stable outlook.

The global rating agency affirmed SBI's short-term foreign currency counterparty credit rating of 'B'. At the same time, it assigned its 'BB+/B' long-term and short-term local currency counterparty credit ratings to SBI, with a negative outlook.

The ratings on SBI acknowledge the bank's strong business profile, underpinned by its position as India's largest commercial bank. The bank's strategy and corporate vision to be the leading financial services group in India is soundly based, said the agency.

SBI's operating efficiency and management information capabilities are expected to benefit from the upgrade of its IT capabilities, which will support the bank's focus on consumer banking, and the introduction of new products and services, it said.

The stable outlook reflects the likelihood that SBI will maintain its overall sound business and financial profile.

Although there has been some pressure on the bank's earnings margin in previous fiscal, the margin remains satisfactory.

The margin is also expected to stabilise, given the bank's strategy of diversifying its loan portfolio into relatively higher-yielding consumer loans, together with more active liability management of its deposits, and retirement of high-cost borrowings, the agency said.