Fitch Ratings affirmed and removed the "ccc" viability rating of India-based IDBI Bank Ltd. from Rating Watch Evolving.
The rating agency said Nov. 1 that it also affirmed the bank's long- and short-term issuer default ratings at BB+ and B, respectively, with a stable outlook. The bank's support rating was affirmed at 3, while its support rating floor was affirmed at BB+.
The removal of the viability rating from Rating Watch Evolving reflects better visibility on the potential new equity the bank will receive from its stake sale to Life Insurance Corp. of India, Fitch said. The bank received 21 billion rupees from LIC in August when the insurer raised its stake in the bank to 14.9%. It expects to get an additional 200 billion rupees of fresh equity by March 31, 2019.
Fitch noted that the material improvement in the bank's core capital could more than offset downside risk in asset quality and earnings.
The rating affirmation reflects the expectation of a moderate probability of extraordinary state support given the bank's market position, systemic importance and linkages to the state.
