The proposed takeover of troubled Indian bank, Lakshmi Vilas, by DBS India, is not large enough to affect DBS’s credit ratings, says Fitch Ratings, in a non-rating action commentary.

“Lakshmi Vilas’ balance sheets amount to less than 1% of DBS's risk-weighted assets (RWA), assets and equity, meaning it will not immediately affect the group's asset quality, profitability or capitalisation and, consequently, its credit ratings,” writes the team behind the report.

However, the bank’s credit profile could still be altered depending on its earnings and capitalisation risks over the medium term, added the ratings agency.

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