Capital Intelligence (CI), the international credit rating agency, today announced that it has affirmedAxis Bank Ltd’s (ABL) foreign currency ratings at BBB- long-term and A3 short-term, the same ratings asthose assigned to the Indian sovereign. The support rating is maintained at 3 and reflects the Bank’sprimarily private sector ownership. Given the Bank’s size and systemic importance, the likelihood of theBank receiving support from the sovereign in case of need is high. ABL’s financial strength rating ismaintained at BBB+ and is underpinned by the Bank’s diversified business base and overall goodfinancial fundamentals. All ratings have been assigned Stable outlooks.ABL’s profitability ratios continued to strengthen in FY2009 and in H1 of FY2010 on the back of stronggrowth in net interest and non-interest income. ABL enjoys wider than industry average net interestspreads partly reflecting the Bank’s growing low-cost customer deposit base. Asset quality remains gooddespite a slight deterioration of key ratios over the last eighteen months largely due to the economicdownturn in the domestic economy. However, restructured loans, which were classified as standardassets, have grown substantially. On the plus side, restructured loans are reportedly performing well withfew slippages into the non-performing category. The Bank raised substantial new equity capital in H1 ofFY2010 and this has strengthened its capital adequacy ratio. Liquidity ratios continue to be good. ABL isexpected to perform well this year particularly considering the improved domestic business confidencealong with the upturn in economic activity in India in the second quarter of FY2010.ABL was established as UTI Bank in April 1994. It changed its name to Axis Bank Ltd in 2007. TheBank’s shares are widely held with the Life Insurance Corporation of India, one of its founders, holding thelargest stake at 10.4%. With total assets of nearly USD29 billion at end March 2009, ABL is ranked 11thin terms of total assets in Capital Intelligence’s peer group of 23 Indian banks. The Bank operates abranch network of 916 outlets at end September 2009. Its 3,800+ ATM network is the third largest in thecountry. The Bank provides a wide range of retail, corporate and investment banking services. It alsooperates three branches and two representative offices overseas.