Moody’s Upgrade Axis Bank & ICICI Bank: There is good news for the two private giants of the private sector, ICICI Bank and Axis Bank. Due to the excellent financial performance of both the banks, the international rating company Moody’s has upgraded the ratings of both the banks. ICICI Bank and Axis Bank have been upgraded based on their standalone financial performance which is known in market parlance as baseline credit assessment, citing improvement in asset quality, profitability and capital.
Moody’s ranks ICICI Bank and Axis Bank, two of the country’s three largest private banks, on that scale, up a notch to Baa3, which is in line with the sovereign rating grade of investment in India. Baa3 rating has been given on the deposits of banks as they could not be given above the sovereign rating grade of the country.
Moody’s Investors Services said in a note, there has been a significant improvement in their asset quality with both gross and non-performing loan (NPL) ratios declining. Moody’s said the reduction in credit costs was accompanied by an increase in low provision coverage. Profits have increased due to lower credit cost.
On Friday, the share of Axis Bank closed at Rs 635.60 on the market, while the share of ICICI Bank closed at Rs 688 with a gain of 1.5 per cent. In fact, banking stocks have been beaten up due to profit-booking by foreign investors in the stock market, due to which the shares of both the banks have declined. However, due to the upgrade of Moojeed, the sentiments of both the stocks can be seen to improve.