S&P Global Ratings has assigned a ‘BBB’ long-term and ‘A-2’ short-term issuer credit rating to Bank of Maharashtra (BOM) on September 24, 2025. The ratings reflect the bank’s robust capitalization, solid funding, healthy liquidity, and a very high likelihood of extraordinary government support if needed. The outlook on the long-term rating is stable, indicating expectations of sustained financial strength.
Credit Ratings Assigned
On September 24, 2025, S&P Global Ratings assigned a ‘BBB’ long-term and ‘A-2’ short-term issuer credit ratings to Bank of Maharashtra (BOM). The outlook on the long-term rating is stable.
Rationale for the Ratings
The ratings are based on the expectation of extraordinary support from the Government of India if needed, reflecting BOM’s important role as a public sector bank. S&P views a very high likelihood that the government would provide timely and sufficient extraordinary support in the event of financial distress. This view is underpinned by BOM’s robust capitalization, solid funding, and healthy liquidity.
BOM’s stand-alone credit profile (SACP) is assessed at ‘bbb-‘, driven by its strong capitalization and deposit base. The bank’s growing but still small size and concentrated loan portfolio partially temper these strengths.
Financial Highlights and Expectations
S&P anticipates the bank’s risk-adjusted capital (RAC) ratio will strengthen to about 10.5%-11% over the next two years. This is despite high projected loan growth of about 14%-15% per annum.
S&P expects BOM’s credit losses to remain about 1.0% of customer loans over the next two years. New nonperforming loan formation (slippage) is expected to remain above 1% due to areas of risk such as micro, small, and midsize enterprises, and agriculture.
The bank has a strong stable funding ratio, averaging about 135% over the past five years. Current and savings account (CASA) deposits formed about 50.0% of the bank’s total customer deposits as of the end of June 2025.
Outlook
The stable outlook reflects the expectation that BOM will raise capital and sustain its solid capital position, as well as the likelihood of government support remaining very high over the next two years. BOM is also expected to maintain solid funding and liquidity.
Downside and Upside Scenarios
BOM could be downgraded if S&P lowers its sovereign ratings on India or if the bank’s RAC ratio falls sustainably below 10%.
An upgrade is unlikely over the next two years.
Source: BSE
