S&P Global Ratings have upgraded Axis Bank's long-term issue rating to 'BBB-' from 'BB+' on improving asset quality. It has also raised its long-term and short-term issuer credit rating to 'BBB-/A-3' from 'BB+/B' with outlook remaining 'Stable'. Further, S&P Ratings expects stressed assets of the bank to decline from 3.7% in March 2022 to 2.5-3% in March 2023 while credit cost is anticipated to remain below 1%
Rating upgrades in anticipation of a healthy asset quality trend remains a positive for the bank. Focus on risk adjusted business growth, improving margin trajectory and cost to asset at 2-2.5% is expected to aid return ratios and sustainability of performance thereby driving valuations ahead
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