Fitch Affirms Ratings for PNB and BoB with Stable Outlook

Fitch Ratings has affirmed the ratings of Punjab National Bank and Bank of Baroda at 'BBB-' with a stable outlook. The ratings reflect the likelihood of state support due to significant government ownership and the banks' market positions. Both banks have also seen an upgrade in their Viability Ratings.

Fitch Ratings affirmed the 'BBB-' ratings of Punjab National Bank (PNB) and Bank of Baroda (BoB) on Wednesday, citing a stable outlook for both institutions. The ratings agency highlights a significant probability of exceptional state support, as the government holds substantial stakes in both banks.

With a 70% stake in PNB and 64% in BoB, government involvement plays a crucial role in the financial stability and support system for these banks. PNB's robust market presence further bolsters its rating, reflecting its importance in the Indian banking sector.

Additionally, Fitch upgraded the Viability Ratings to 'bb' from 'bb-' for both banks, attributed to enhancements in their financial profiles, including better asset quality, capitalization, and profitability amid a more favorable operating environment.

(With inputs from agencies.)