Moody's Affirms Axis Bank Deposit Rating - Stable Outlook

New Delhi, Feb 21 (PTI) Moody's on Wednesday affirmed Axis Bank's deposit ratings with a stable outlook saying India's favourable operating environment offers the bank an opportunity to further strengthen its market position.

The bank's diversified loan portfolio and above-industry average profitability will support internal capital generation and its strong solvency. In addition, Axis' strong retail franchise, access to low-cost deposits and sufficient holdings of liquid government securities will support its funding and liquidity, it said,

Moody's expects the bank's asset quality to remain broadly stable as India's economic momentum continues to be robust. Indian corporates' improving profitability and deleveraged balance sheets are supporting stable asset quality.

At the same time, the quality of secured retail loans such as housing and vehicle loans is supported by real end-user demand, stable employment conditions and sufficient asset coverage, Moody's said while affirming Axis Bank's Baa3 long-term deposit ratings at 'Baa3'.

"Axis' rating affirmation with a stable outlook reflects India's favourable operating environment, which offers the bank an opportunity to further strengthen its market position," Moody's said in a statement.

Funding and liquidity will continue to be the bank's credit strengths, with most of its funding coming from retail deposits, including a sizable amount of low-cost current and savings account deposits, Moody's said.

The global rating agency expects Axis to grow loans above the industry's average loan growth of 12-14 per cent in the fiscal year ending March 2025 (fiscal 2025), enabling the bank to gain a larger market share.