News: Moody's upgrades ICICI Bank's financial strength rating

(PTI 16/07/2006) London - Moody's Investors Service has upgraded ICICI Bank's financial strength rating based on its improving financial position and enhanced retail franchise.

It said the bank's financial strength rating has been raised from D+ to C- and said the outlook is stable.

"The bank's foreign currency deposit ratings of Ba2/NP and its senior and subordinated debt ratings of Baa2, which are all constrained by the respective country ceilings, remain unchanged with stable outlooks," it said.

The rating change takes into account the bank's dynamic and successful penetration into Indian retail market where it has managed to capture a significant share of this profitable business. Retail loans and customer deposits now constitute the bulk of ICICI Bank's balance sheet and have been instrumental in gradually improving the bank's profitability and its overall credit risk profile, Moody's said.

The bank's full year results at the end of March 2006 showed a strong financial performance with core operating income registering a 68 per cent growth with an impressive increase in fee income.

Its asset quality has also been improving indicating good quality of its new lending and more specifically the lower credit risk inherent in its retail portfolio.

ICICI Bank's funding profile has also become much more attractive with customs deposits almost fully replacing high-cost borrowings. In addition, the bank was able to raise significant fresh equity in December 2005 that will enable it to leverage its growth potential going forward both domestically and internationally, Moody's said.

ICICI Bank Ltd is headquartered in Mumbai and had total assets of Rs. 2,51400 crore at the March end.