Bank of India slumps 7% as S&P downgrades outlook to 'Negative'

NEW DELHI: Shares of Bank of India ended higher by 0.86 per cent after slipping over 7 per cent in intraday trade. Global credit rating agency S&P downgraded its outlook to ‘negative’ from ‘stable’.

Reacting to the development, the scrip fell 6.53 per cent to hit its fresh 52-week low of Rs 80.10 on the BSE. S&P, however, maintained its BBB- long-term and A3 short-term rating on the bank. S&P also affirmed 'BBB-' long-term issue ratings on Bank of India's outstanding senior unsecured notes and our 'B+' long-term issue ratings on the bank's Basel II compliant hybrid notes.

“The affirmed rating reflects Bank of India's sound franchise and a very high likelihood of support from the government of India (BBB-/Stable/A-3). The rating is one notch higher than the bank's stand-alone credit profile (SACP) of 'bb+' because we expect the government to provide timely and sufficient extraordinary support to the bank if it comes under financial distress,” the rating agency said in a statement.