Shares of large public sector banks like State Bank of India (SBI) and Punjab National Bank (PNB) gained on Friday after international rating agency, Fitch Ratings affirmed long-term issuer default ratings (IDRs) of these banks. At 10:22 am, shares of SBI were trading at Rs 356.85, higher by 2.35 percent. Shares of PNB rose 0.06 percent at Rs 81.80 per share on the National Stock Exchange.

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Fitch Ratings gave ‘BBB-‘ rating with stable outlook to banks including State Bank of India, Bank of Baroda, Punjab National Bank, Canara Bank and Bank of India.

The rating agency estimates that the banks' impaired loans ratio has declined to 10.8 percent in the nine month of FY19 from 11.5 percent in the fiscal ended March 2018 (FY18), marking a reversal in trend.

"The long-term IDRs of SBI, BOB, PNB, Canara and BOI are driven by expectation that the banks are likely to receive extraordinary government support, if required, due to their high systemic importance and majority government ownership," the rating agency said in a note.

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First Published:May 31, 2019 11:04 AM IST