Categories: Business

S&P downgrade axis bank and 4 NBFC on covid 19 risks


rating downgrade

new Delhi. S&P Global Ratings downgraded Axis Bank and 4 NBFC ratings on Friday. According to the rating agency, due to the Corona crisis, the difficulties related to work have increased considerably, due to which this decision has been taken. Apart from Axis Bank, Shriram Transport Finance, Bajaj Finance. The ratings of Manapuram Finance and Power Finance Corp have been reduced.

Axis Bank's credit rating has been reduced one notch to BB Plus which falls in the junk category. According to the rating agency, the risk in India's banking system has increased significantly, which can increase the pressure on the bank's NPAs, while the financial situation can also worsen. According to the agency, Axis Bank's asset quality is better than the average NPA of Indian banks, although its NPAs may remain higher than international banks. As of 31 March, the bank's NPAs stood at 4.86 per cent of the total debt. The rating agency clarified that if the bank's NPA increases in the next few quarters, its rating may be further reduced.

Along with this, Shriram Transport's rating has been reduced to BB Plus, Bajaj Finance has been reduced to BB Minus, Manapuram Finance has been reduced to B Plus and Power Finance Corporation has been reduced to BB Plus. The rating agency said that the biggest impact of the Corona crisis will be on the micro finance segment as it has seen the biggest impact on the small income and they are facing difficulties in paying the debt. At the same time, the lowest impact on home loans is estimated as most of the people in this segment are salaried and their EMIs are going directly from the bank.

This post was published on June 27, 2020 12:18 am

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