INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Fitch Ratings on Friday affirmed the Long-Term Issuer Default Ratings (IDRs) and Viability Ratings of ICICI Bank and Axis Bank at
'BBB-' and 'bbb', respectively
Also, it has revised the outlook on Axis Bank to negative from stable
Fitch has also downgraded ICICI's Support Rating to '3', from '2', and revised its Support Rating Floor to 'BB+', from 'BBB-'
On the negative outlook for Axis Bank, the rating agency said: "Axis' IDR reflects rising pressure on its standalone profile relative to
banks with a Viability Rating of 'bbb-', stemming from heightened asset-quality stress and weak earnings." Its capital buffers are less
comfortable for its current rating despite raising fresh capital, it added.
At 02:45 pm, shares of Axis Bank were trading 2 per cent lower
at Rs 520.35 on the BSE while those of ICICI Bank were trading nearly 1 per cent lower at Rs 281.90.
The private lender reported its
first-ever loss since listing at Rs 2,188.74 crore for the quarter ended March 2018
The bank, which was listed on the exchanges in 1998, had posted a profit of Rs 1,225.10 crore in the corresponding quarter last year.
The
Shikha Sharma-led bank saw its provisions and contingencies spiking nearly threefold to Rs 7,179.53 crore in the fourth quarter against Rs
Fitch has a negative outlook on the banking sector, as a whole
Most state banks reported losses in the financial year ending March 2018 and earnings at large private banks also came under significant
pressure, with Axis reporting its first-ever quarterly loss
"We expect internal capital generation for the sector, including the two private-sector banks, to stay weak in FY19," it said in its press
The outlook on ICICI Bank is stable
ICICI's capital buffers are better even though it has experienced similar financial deterioration like that of Axis Bank in the previous few
years, the press release said.
