Ind Ra affirms Axis Bank long-term issuer rating at 'AAA' with Stable outlook

13 May 2022 , 10:24 AM

India Ratings and Research (Ind-Ra) has affirmed Axis Bank Limited’s (Axis) Long-Term Issuer Rating at ‘IND AAA’ with a Stable Outlook and Short-Term Issuer Rating at ‘IND A1+’.

According to the rationale report, the affirmation of Axis’s Long-Term Issuer Rating factors in its large, pan-India franchise, on both asset and liability sides. 

The Stable Outlook reflects Ind-Ra’s expectation that Axis’s reasonable capital buffers, strong provision coverage ratio (PCR) and additional provisions (which are not included in the PCR) would provide cushion against any near-term shocks. 

For AT1 instruments, the agency considers the discretionary component, coupon omission risk, and the write-down/conversion risk as the key parameters to arrive at the ratings. The agency recognises the unique going-concern loss-absorption features that these bonds carry and differentiates them from the bank’s senior debt, factoring in an increased probability of an ultimate loss for investors in these bonds.

At around 10:27 AM, Axis Bank was trading at Rs653 apiece up by Rs3.65 or 0.56% on the BSE.