S&P Lifts Ratings of SBI, HDFC Bank, Bajaj Finance, Others

S&P Global Ratings has upgraded the credit ratings of 10 major Indian financial institutions, including State Bank of India, HDFC Bank, and Tata Capital, following its recent upgrade of India’s sovereign rating to ‘BBB’ from ‘BBB-’, PTI reported.

The rating agency said India’s lenders and finance companies are well positioned to benefit from the country’s strong growth trajectory, improved credit culture, and structural reforms.

“India's financial institutions will continue to ride the country's good economic growth momentum. These entities will benefit from their domestic focus and structural improvements in the system such as in the recovery of bad loans,” S&P noted.

Seven banks like SBI, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Union Bank of India, and Indian Bank, saw upgrades in their long-term issuer credit ratings, alongside three finance companies, Bajaj Finance, Tata Capital, and L&T Finance.

S&P expects the sector to maintain “adequate asset quality, good profitability, and enhanced capitalization over the next 12–24 months” despite some stress pockets. The agency highlighted that credit risk in the system has reduced meaningfully in recent years, aided by reforms such as the Insolvency and Bankruptcy Code (IBC), which has strengthened creditor rights and improved payment discipline.

The upgrade comes just a day after S&P raised India’s sovereign rating, citing resilient fundamentals, improved monetary policy credibility, and a supportive growth outlook for the next 2–3 years. S&P, however, added that the ratings of Indian financial institutions remain capped by the sovereign rating, given the close linkages between banks and the government.

Earlier this week, the agency also raised ratings of key state-owned and private corporates, including ONGC, Power Grid, NTPC, Tata Power, Exim Bank, and IRFC, moving them up to ‘BBB’ from ‘BBB-’, with stable outlooks.