Fitch affirms highest rating on HDFC Bank

Ratings firm Fitch today said it has affirmed its top national rating with a stable outlook on private sector lender HDFC Bank on the back of the lender's robust financial and operational performance.

"Fitch Ratings has today affirmed India-based HDFC Bank Ltd's national long-term rating at 'AAA(ind)'," Fitch Ratings said, adding that it has also affirmed the highest short-term rating of 'F1+(ind)' to the bank.

"...Rating reflects its robust financial and operational performance, which has consistently outperformed that of its larger domestic peers and is amongst the best in the Indian banking system. The ratings are underpinned by the bank's steady track record of growth, current account-savings account (CASA) focused strategy, and good risk management," it added.

The 'AAA' rating denote the highest rating assigned by the agency in its national rating scale and is assigned to issuers with the lowest expectation of default risk.

The 'F1' rating, on the other hand, indicates strongest capacity for timely payment of financial commitments.

Fitch has also affirmed top ratings on the bank's Tier 2 subordinated loans worth Rs 3,993 crore and certificates of deposits of Rs 15,000 crore.

"The ratings also reflect the bank's credible management which has pursued growth strategies (both organic and inorganic) without compromising on critical areas of asset quality, capital ratios, yield spread and profitability," Fitch said.

It said that the bank's funding profile remains strong with a CASA ratio of 52% in FY10, which is among the best in the Indian banking sector.

HDFC is India's second largest private sector bank with an asset base of $50 billion in 2009-10. It has 1,700 branches and over 4,300 ATMs in the country.