Singapore, Aug 6 (ANI): S&P Global Ratings has revised its rating outlook on Indian Bank to stable from negative.

At the same time, it affirmed BBB-minus long-term and A-3 short-term issuer credit ratings on the bank.

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"We revised the rating outlook to reflect our view of Indian Bank's strengthened capital position stemming from its recent equity capital raising through qualified institutional investors, and its improving profitability," said S&P.

"In our view, the stronger capital position should give the bank sufficient cushion against potential asset quality pressures from the brunt of a Covid-19 second wave."

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S&P said the baseline expectation is for Indian Bank's weak loans (gross non-performing loans plus restructured loans) to stay below 12 per cent of total loans and credit costs not materially worse than 2 per cent.

The pre-diversification risk-adjusted capital ratio for Indian Bank is forecast to trend above 5 per cent despite assumption of 10 to 12 per cent annual credit growth and elevated credit costs over the next 12 to 24 months.

S&P expects the bank to further increase its capitalisation to protect the balance sheet against downside risks. The bank already has approval for raising equity capital of up to Rs 4,000 crore. (ANI)

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