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Informist, Friday, Feb. 27, 2026

--S&P Global assigns 'BBB' long-term issuer credit rtg to Indian Overseas Bk

--S&P Global assigns 'A-2' short-term issuer credit rtg to Indian Overseas Bk

NEW DELHI – S&P Global Ratings has assigned a long-term rating of 'BBB' with a stable outlook on Indian Overseas Bank, joining Fitch Ratings from earlier this week in initiating coverage on the lender. S&P Global Ratings has also assigned a short-term issuer credit rating of 'A-2' to the bank.

The ratings agency expects an extraordinary level of support, if needed, from the government, which held 92% stake in the bank as of Dec. 31. That has taken the long-term rating a notch above the standalone credit profile rating of 'bbb-', S&P Global said.

"The bank has robust capitalization, solid funding, and healthy liquidity that underpin its credit quality," S&P Global Ratings said. "The stable outlook on the long-term rating reflects our view that the India-based bank will maintain its solid capital position and funding and liquidity profile over the next two years."

Indian Overseas Bank has a concentrated presence in southern India and is gradually expanding but has only a modest deposit base. Internal capital generation has been steady and timely capital infusions are also likely, with the above-average loan growth providing a tailwind to the bank, S&P Global Ratings said. However, the pace of loan growth and loan concentration expose the lender to asset quality risk, the ratings agency said. The bank's top 20 borrowers account for 15% of its total advances.

Indian Overseas Bank's net profit for the quarter ended December surged 56% on year to INR 13.65 billion, driven by a sharp decline in tax outgo despite rise in provisions. At 1321 IST, the bank's shares were down 0.2% at INR 36.72 on the National Stock Exchange.  End

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Aaryan Khanna

Edited by Ashish Shirke

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