New Delhi: Axis Bank's Managing Director and CEO Shikha Sharma has said that global credit rating agency Moody's Investors Service's move to downgrade the ratings of the lender recently will not impact its fund raising plans.
"You have to talk to them (Moody's) about the reasons for the downgrade. However, they recognize our balance sheet is strong," Sharma told reporters on the sidelines of an event.
Earlier Monday, Moody's Investors Service downgraded standalone bank financial strength and hybrid ratings of India's three largest private sector lenders ICICI Bank, HDFC Bank and Axis Bank, in line with the sovereign rating of the nation, a fortnight after warning the lenders about the possibility of the same.
The standalone rating for the three banks has been lowered to 'D+' from the earlier 'C-', while the hybrid rating has been revised to 'Baa2' from 'Baa3', Moody's had said in a statement. However, all revised ratings carry stable outlooks, it had added.
Banks rated 'D' display modest intrinsic financial strength, potentially requiring some outside support at times, according to Moody's definition.
Meanwhile, another global credit rating agency Standard & Poor's (S&P) also cut outlook on its long-term counterparty credit ratings on 11 major Indian public and private sector financial institutions, including State Bank of India, ICICI Bank, HDFC Bank and Axis Bank to 'negative' from 'stable', but kept ratings unchanged while warning of a potential downgrade depending on their asset quality and India's sovereign rating.
Notably, the downgrade came even as Axis Bank and its two private sector peers posted healthy financial earnings.
Axis Bank's fiscal fourth quarter (Jan-Mar) net profit for fiscal 2011-12 rose 25.2% to Rs 12.77 billion from Rs 10.2 billion in the same quarter a year ago driven by higher income from interest and investments and fall in provisions.
The bank's capital adequacy ratio -- the amount of capital in proportion to a lender's advances -- was at 13.66% at the end of the March quarter, higher than 12.65% in the same period a year ago.
Shares of Axis Bank Thursday ended at Rs 949.95 on the Bombay Stock Exchange (BSE), down 2.19% from the previous close.