Fitch affirms ratings of ICICI and Axis Bank

New Delhi: Fitch Ratings on Thursday affirmed ratings of private sector lenders Axis Bank and ICICI Bank, with a stable outlook.

The Long-Term Issuer Default Rating (IDR) of both banks has been affirmed at ‘BB+’. A ‘BB’ IDR indicates an elevated vulnerability to default risk. Axis Bank’s viability rating has been retained at ‘BB’, while ICICI Bank’s has been upgraded to ‘BB+’. A ‘BB’ viability rating denotes moderate prospects for ongoing viability.

Fitch said India’s strong medium-term growth potential, and its large, diversified economy are reflected in Fitch’s operating environment (OE) score.

Fitch projects GDP growth of over 6 per cent in the financial year ending March 2025 (FY25) and FY26, driven by domestic demand, government capex and improving capacity utilisation. “The growth will support Indian banks’ ability to sustain profitable business in the medium term, if risks are effectively managed,” Fitch said while affirming Axis Bank’s rating.

With regard to ICICI Bank, Fitch said it expects a moderate increase in ICICI’s loan/deposit ratio as the bank aims to balance loan and deposit growth.

“We have revised ICICI’s asset quality score to ‘BB’, from ‘BB-’, and the outlook to stable, from positive. This follows an improved impaired loans ratio, which we expect to be sustained at around current levels,”

Fitch said.