Moody's upgrades 4 Indian financial institutions' ratings

Moody's Investors Service has upgraded the long-term ratings of India's four financial institutions to Baa2 from Baa3. These are: Export-Import Bank of India (EXIM India), HDFC Bank Limited (HDFC Bank), Indian Railway Finance Corporation Limited (IRFC), and State Bank of India (SBI). 

The agency has also upgraded HDFC Bank's baseline credit assessment (BCA) and adjusted BCA to baa2 from baa3. 

Further, the agency has upgraded the Counterparty Risk Assessment (CR Assessment) of HDFC Bank and its Hong Kong branch to Baa1(cr) from Baa2(cr); and of SBI, its Hong Kong, London and Nassau branches to Baa2(cr)/P-2(cr) from Baa3(cr)/P-3(cr). 
Moody's has also assigned a CR Assessment of Baa2(cr)/P2(cr) to State Bank of India, DIFC branch. In addition, it has changed to stable from positive the ratings outlook for IRFC; EXIM India and its London branch; HDFC Bank, its Bahrain and Hong Kong branches; as well as SBI and its Hong Kong, London, and Nassau branches. The rating agency also assigned a stable outlook to SBI's DIFC branch. 

Moody's rating actions follow the upgrade of the India's local and foreign currency issuer ratings to Baa2 from Baa3 on Thursday. 

Prior to this rating action, HDFC Bank's BCA and ratings were constrained by India's previous sovereign rating of Baa3 given the bank's significant exposure to the government in common with other Indian banks. As such, an upgrade of the sovereign rating also drove an upgrade of the bank's BCA and ratings. 

The stable outlook on the four financial institutions ratings is in line with the stable outlook on the Indian sovereign's rating.