Moody’s downgrades BoB, Canara Bank, PNB

Moody’s downgrades Bank of Baroda(BoB), Canara Bank and Punjab National Bank (PNB).

Slower economic growth, deteriorating asset quality and declining margins have prompted the global credit rating agency Moody’s Investors Service to downgrade the ratings and credit assessments of three major public sector banks — Bank of Baroda, Canara Bank and Punjab National Bank.

The agencyMoody-Global-Credit-Rating-Agency also changed the financial strength ratings of Union Bank of India to negative.

“The downgrades for Bank of Baroda, Canara Bank and Punjab National Bank, and the negative outlook to Union Bank of India primarily reflect the challenges of the current macroeconomic environment, which have been exacerbated by the depreciating rupee and high levels of inflation,” Moody’s said.

Moody’s pointed to the worsening asset quality at Indian banks, with total non-performing assets and restructured loans rising above 8 per cent of their loan book and loan loss reserves coverage for these impaired loans under 25 per cent as of end-March 2013.

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