With the ratings of SBI being depreciated the stock plunged quite a bit in the last trading sessions. It also left some impact on the other banking stocks and the banking sector as a whole. However despite it being among the headlines the chairman of SBI says that its no cause of worry and is quite calm. On Tuesday the stock had already plunged down by 4% but as per all the brokerages there would be no change in the earnings forcasts of the script. The Moody’s downgrade of the stock from its earlier rating of C to D+ came on account of the lender’s low Tier-I capital ratio and deteriorating asset quality.
This has led to concerns and government would have to play a role in this by infusing some fresh capital in India’s largest bank. As per analysts the factors leading to the downgrade were already known to most of the people and were reflected into the stock as well. So there is no sense of serious concerns on the stocks performance in the coming months.
However the analysts fear of a decrease in the ratings of some private banks too. Although it may lead to such a situation Moody’s have reaffirmed a C rating for ICICI Bank today. Banking Index was down on the last trading day with SBI shedding deep cuts.
Bell the bull says: Moody’s rating came in as revision of the ratings for the financial institution where SBI was downgraded to D+ from its pre-existing rating of C.