Fitch Rates State Bank of India's USD600 Million Bonds Final 'BBB-'

(The following statement was released by the rating agency) Fitch Ratings-Singapore-13 January 2021: Fitch Ratings has assigned a final rating of 'BBB-' to State Bank of India 's (NS: SBI ; BBB-/Negative) USD600 million 1.80% senior unsecured notes due July 2026. This follows the completion of the securities' issue and the receipt of final documents conforming to information previously received. The final rating is the same as the expected rating assigned on 5 January 2021. The securities constitute SBI's direct, unconditional, unsubordinated and unsecured obligations and will at all times rank pari passu among themselves and with all of its other unsubordinated and unsecured obligations. The notes are issued by SBI acting through its branch in London. Key Rating Drivers The senior unsecured instruments are rated at the same level as the bank's Issuer Default Rating (IDR), in accordance with Fitch's criteria. SBI's IDR is driven by its Support Rating Floor ( SRF (NS: SRFL )) of 'BBB-', which is higher than its Viability Rating (VR) of 'bb'. The SRF is based on a Support Rating of '2', which reflects Fitch's expectation of a very high probability of extraordinary support from the Indian sovereign (BBB-/Negative), if required, in light of the bank's very high systemic importance, quasi-sovereign status, and much broader policy role than its state-owned peers, which was demonstrated in the SBI-led rescue of Yes Bank (NS: YESB ) in March 2020. For more details on SBI's ratings and credit profile, see "Fitch Affirms State Bank of India (NS: BOI )'s IDR at 'BBB-'; Outlook Negative", dated 3 December 2020, available at www.fitchratings.com. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - SBI's senior debt ratings are broadly sensitive to the same considerations that affect its IDR. Positive rating action on the IDR will result in a similar change in the rating on the senior unsecured instruments. Factors that could, individually or collectively, lead to negative rating action/downgrade: - A negative change in the IDR will result in a similar change in the senior unsecured instruments' rating. Best/Worst Case Rating Scenario International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit [https://www.fitchratings.com/site/re/10111579] Date of Relevant Committee 01 December 2020 REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG Considerations SBI has an ESG Relevance Score of '4' for Governance Structure. It reflects our assessment that key governance aspects, in particular board independence and effectiveness, ownership concentration and protection of creditor or stakeholder rights are a moderate influence on the VR. It is a negative influence since Fitch views governance to be less developed, which is evident from weak underwriting that results in high levels of poorly performing loans and credit losses. The board is dominated by government appointees, and business models often focus on supporting government strategy with lending directed towards promoting socioeconomic and macroeconomic policies, which may include lending to government-owned companies. These factors also drive our view on the bank's state linkages that affect support prospects that drive the long-term ratings. SBI also has an ESG Relevance Score of '4' for Financial Transparency. It reflects our assessment that the quality and frequency of financial reporting and the auditing process have a moderate influence on the VR. It is a negative influence, however, since these factors have become more prominent in the past few years because of the sharp financial deterioration at state banks as well as the widely reported divergences in non-performing loan recognition between the banks and the regulator, although these incidents have narrowed in recent years. Still, financial transparency is viewed pivotal for general business and depositor confidence and can lead to significant reputational risk if not managed well. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg State Bank of India ----senior unsecured; Long Term Rating; New Rating; BBB- Contacts: Primary Rating Analyst Tania Gold , Senior Director +65 6796 7224 Fitch Ratings Singapore Pte Ltd. One Raffles Quay #22-11, South Tower Singapore 048583 Secondary Rating Analyst Saswata Guha, Director +91 22 4000 1741 Committee Chairperson Jonathan Cornish, Managing Director +852 2263 9901 Media Relations: Leslie Tan, Singapore, Tel: +65 6796 7234, Email: leslie.tan@thefitchgroup.com Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: bindu.menon@fitchratings.com Additional information is available on www.fitchratings.com Additional Disclosures Solicitation Status (https://www.fitchratings.com/site/pr/10149071#solicitation-status) Additional Disclosures For Unsolicited Credit Ratings (https://www.fitchratings.com/site/pr/10149071#unsolicited-credit-ratings-disclosures) Endorsement Status (https://www.fitchratings.com/site/pr/10149071#endorsement-status) Endorsement Policy (https://www.fitchratings.com/site/pr/10149071#endorsement-policy) ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. 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