SBI Share: The biggest good news of the year- rating improved due to Yes Bank- keep an eye on the stock:

News Topical, Digital Desk : The world's leading rating agency Moody's has raised the Baseline Credit Assessment (BCA) rating of the country's largest bank SBI (State Bank of India) from "ba1" to "baa3". This means that the bank's internal financial position is now considered 'medium grade'. This upgrade is based on the bank's strong capital position and its plans to increase capital in the coming months.

What does the improvement in rating mean-
Moody's has raised SBI's BCA rating from speculative grade "ba1" to investment-grade "baa3".

SBI is soon going to raise up to ₹25,000 crore through equity and up to ₹20,000 crore through debt.

Profit from Yes Bank The bank will get huge profits by partially selling its stake in Yes Bank, which will further strengthen the CET1 ratio.

Capital position as of March 2025- SBI's total Capital Adequacy Ratio was 14.25% and CET1 ratio was 10.81%. The agency has given "Stable Outlook" while maintaining SBI's "Baa3" long-term deposit rating.

Profit may decline slightly- SBI's return on average assets (ROA) stood at 1.1% in FY25, but due to the reduction in policy rates, profits may soften slightly in the coming few quarters. According to Moody's, most of the loans in the bank's loan book are secured - such as home loans and auto loans. The corporate book also includes highly rated borrowers. This rating upgrade by Moody's will further strengthen SBI's credibility and investor confidence. Although the impact of the reduction in interest rates may be partially seen on the bank's earnings, the bank's position is considered stable and strong from a long-term perspective.