Fitch Ratings on Thursday affirmed the ratings of Axis Bank and ICICI Bank with a stable outlook citing supportive operating environment and large domestic franchise.
Fitch Ratings has affirmed India-based Axis Bank and ICICI Bank’s Long-Term Issuer Default Rating (IDR) at ‘BB+’, the global agency said in two separate rating commentaries.
Fitch has also affirmed the banks’ Government Support Rating (GSR) at ‘bb+’ and Viability Rating (VR) at ‘bb’.
Fitch said its IDR ratings reflect expectation of a moderate probability of extraordinary state support from the government relative to large state banks.
The agency said its expectation of a supportive operative environment is on account of India’s robust medium-term growth potential. Fitch expects GDP growth of 7 per cent in 2024 and 6.5 per cent in 2025, supported by investment prospects. “The economy has been resilient as healthy business sentiment, steady financial markets and the government’s capital spending buffered global economic headwinds and inflation. These factors are conducive for banks to sustain profitable business, provided risks are well-managed,” Fitch said.
With regard to Axis Bank, Fitch said the bank’s appetite for growth is likely to remain above the sector average, albeit similar to other large private banks.
