Moody's on Aug. 4 downgraded ICICI Bank Ltd. unit ICICI Bank UK Plc's long-term local- and foreign-currency deposit and senior unsecured debt ratings to Baa1 from A3, and changed the outlook to stable from positive.
The agency also downgraded the bank's adjusted baseline credit assessment to "ba1" from "baa3" and its long-term counterparty risk assessment to Baa1(cr) from A3(cr). Moody's affirmed ICICI Bank UK's short-term local- and foreign-currency deposit ratings at Prime-2, its baseline credit assessment at "ba2" and its short-term counterparty risk assessment at Prime-2(cr).
The ratings action follows the downgrade of ICICI Bank Ltd's baseline credit assessment to "ba1" from "baa3", which reflects Moody's view that its capacity to provide support to ICICI Bank UK has diminished, although the agency said it still expects a very high probability of support from the parent, driven by its very strong capital, strong core profitability and unrealized gains in its insurance subsidiary.
Moody's noted that the downgrade takes into account its advanced loss-given-failure analysis, indicating that ICICI Bank UK's deposits and senior unsecured debts will face extremely low loss-given-failure and the agency's assessment of a low probability of government support for the bank.
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