Fitch Ratings confirmed ICICI Bank’s “BB +” rating with a negative outlook and maintained the lender’s viability rating at BB.
Negative outlook cites a better-than-expected recovery in business and economic activity after the second wave of COVID-19, despite the recent upward revision of the domestic bank’s business outlook to stabilize from negative. It was brought.
Economic momentum and regulatory action should support a modest improvement in the financial profile of domestic banks over the next 12-24 months, even if the challenges stated by the authorities at the end of Monday remain.
Citing key rating factors, authorities said ICICI’s “BB +” long-term rating was support-led and linked to India’s sovereign rating (BBB- / negative).
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This is due to its size and system importance, which is due to its significant growth in market share (6.1% of system assets and 5.5% of deposits in FY2008, and). Due to a significant retail deposit base).
ICICI is a system-critical bank and the state has a track record of supporting such banks, but ICICI has not previously required assistance. And with the bailout of Yes Bank, a medium-sized private bank, in March 2020 strengthened our view.
Negative outlooks for ratings reflect government agencies’ outlook for sovereign ratings, he said.
In the agency’s view, the bank’s risk profile has a stronger impact on the assigned feasibility assessment than the operational environment, rather than the weighting suggests.
Banks’ desire for risk is lower than before the pandemic, but has squeezed financial indicators over the past few years, especially in terms of asset quality and earnings.
Fitch confirms ICICI Bank's rating with a negative outlook and retains a viable rating at BB
Source link Fitch confirms ICICI Bank's rating with a negative outlook and retains a viable rating at BB