S&PGR No Longer Counts Indian Public Sector Bank AT1 As Equity; Affirms Issuer Ratings; Raises Rating On SBI's Hybrids

Based on recent events, S&P Global Ratings believes that the hybrid capital issued by public sector banks in India is not acting as equity. As such, we no longer count their additional tier-1 (AT1) instruments as equity. However, our capital ratios on these banks remain supported by the government's ongoing recapitalization program. We are affirming our issuer credit ratings on all public-sector banks in India, with stable outlooks. At the same time, we are raising our issue rating on SBI's Basel-III compliant AT1 instrument and AT1/Tier II program ratings because we expect pre-emptive government support for these instruments would be forthcoming. These are the only Basel III compliant instruments that we currently rate in India. SINGAPORE (S&P Global Ratings) March

...+ Based on recent events, S&P Global Ratings believes that the hybrid capital issued by public sector banks in India is not acting as equity. + As such, we no longer count their additional tier-1 (AT1) instruments as equity. However, our capital ratios on these banks remain supported by the government's ongoing recapitalization program. + We are affirming our issuer credit ratings on all public-sector banks in India, with stable outlooks. + At the same time, we are raising our issue rating on SBI's Basel-III compliant AT1 instrument and AT1/Tier II program ratings because we expect pre-emptive government support for these instruments would be forthcoming. These are the only Basel III compliant instruments that we currently rate in India. SINGAPORE (S&P Global Ratings) March 16, 2018--S&P Global Ratings said today that it raised its issue ratings on the hybrid capital instruments issued by State Bank of India (###-/Stable/A-3). We believe the default risk on these instruments is lower than...

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