S&P Global Ratings has revised its rating outlook for ICICI Bank from negative to stable.
It has confirmed its long-term issuer rating of “BBB-” and short-term issuer ratings of “A-3” for the private lender and its long-term issuance rating of “BBB-” for the bank’s senior notes.
“We have revised the rating outlook to reflect our belief that ICICI Bank will maintain a strong capital position for the next 24 months. The bank will benefit from the sale of holdings in subsidiaries and the gradual normalization of profits, which should reduce the risks associated with its capital position, “S&P Global Ratings said in a statement on Friday.
The agency expects ICICI Bank to maintain a risk-adjusted equity ratio of more than 10 percent for the next 24 months. “Our expectation takes into account a credit growth of 13 to 14 percent for the bank, an improvement in earnings and the sale of shares in insurance subsidiaries in the reporting period,” it said.
Stressed credit at its peak
However, the agency expects ICICI Bank’s strained loans (bad loans and restructured loans) to remain high compared to international competitors.
It said the bank’s stressed loans will be released by Jan.