Page 5 - Fitch Ratings

RBI action could increase business volatility for some NBFCs: Fitch

Firms' implementation of regulatory instructions varies, says ratings agency

Banks' underwriting standards at risk amid consumer loan growth: Fitch

Fitch Ratings on Monday said Indian banks' risk appetite through higher loan growth will remain a key consideration for their creditworthiness despite improved financial performance. It said asset quality pressures from the previous credit cycle are subsiding, creating a favourable business environment. This has bolstered banks' potential and appetite for growth. Bank loans grew by 16 per cent in the financial year ended March 2024, similar to FY23, exceeding the 8 per cent CAGR (compound annual growth rate) over FY15-FY22. Retail loans constitute around 10 per cent of system loans, and grew at a 20 per cent CAGR since FY21, fuelled by a shift towards unsecured credit to expand margins, the US-based rating firm said. Large private banks gained significant market share in the last credit cycle and continue to grow rapidly; state banks also returned to brisk growth but lagged large private banks, Fitch said in a report titled 'Risk profile weighs on Indian banks' viability ratings ..

Fitch affirms ratings of Axis, ICICI banks on supportive working conditions

Fitch Ratings on Thursday affirmed the ratings of Axis Bank and ICICI Bank with a stable outlook citing supportive operating environment and large domestic franchise. Fitch Ratings has affirmed India-based Axis Bank and ICICI Bank's Long-Term Issuer Default Rating (IDR) at 'BB+', the global agency said in two separate rating commentaries. Fitch has also affirmed the banks' Government Support Rating (GSR) at 'bb+' and Viability Rating (VR) at 'bb'. Fitch said its IDR ratings reflect expectation of a moderate probability of extraordinary state support from the government relative to large state banks. The agency said its expectation of a supportive operative environment is on account of India's robust medium-term growth potential. Fitch expects GDP growth of 7 per cent in 2024 and 6.5 per cent in 2025, supported by investment prospects. "The economy has been resilient as healthy business sentiment, steady financial markets and the government's capital spending buffered global econom

Indian Rupee likely to rebound to 82 per dollar on bond inflows: Fitch

The rupee is expected to appreciate to 82 per dollar by the year-end, from about 83.50 currently, said Jeremy Zook who is a director at Fitch in Hong Kong

Fitch downgrades China outlook to negative on economic growth risks

China's factory output and retail sales topped forecasts in January-February, joining better-than-expected exports and consumer inflation indicators, providing an early boost to Beijing's hopes

China rejects Fitch's ratings of its fiscal outlook, says economy 'stable'

China's Finance Ministry denounced a report by Fitch Ratings that kept its sovereign debt rated at A+ but downgraded its outlook to negative, saying Wednesday that China's deficit is at a moderate and reasonable level and risks are under control. Risks to China's public finances are rising, Fitch said, as Beijing works to resolve mounting local and regional government debts and to shift away from heavy reliance on its troubled property industry to drive economic growth. But while slower growth is adding to the challenges of coping with heavy borrowing, Fitch said it kept China's A+ rating due to its large and diversified economy, its vital role in global trade and its huge foreign exchange reserves. The Finance Ministry said it was a pity that Fitch had downgraded its sovereign debt and faulted its methods, saying it had failed to take into account Beijing's moves toward appropriately intensifying, improving quality and efficiency of its government spending. In the long run, ...

IIFL Finance hits lowest level since Oct' 22; stock tanks 42% in 2 weeks

Multiple rating agencies including Fitch Ratings, Brickwork Ratings India, CRISIL Ratings, Care Ratings, and Icra have revised their ratings on IIFL Finance

Fitch Ratings ups GDP growth forecast to 7% for FY25 on demand push

It expects 50 bps rate cut by RBI in the second half of 2024

After RBI restriction, Fitch puts IIFL Finance on negative rating watch

"The move reflects a downside risk to IIFL Finance's franchise, profitability and overall risk profile if regulatory restrictions on new gold-backed lending are prolonged," Fitch said in a note

Fitch raises GDP growth estimates for FY24, FY25, tempers view on rate cuts

The RBI has kept the repo rate unchanged at 6.50% for the last six consecutive meetings and has reiterated its commitment to reaching the 4% inflation target on a sustainable basis

Fitch upgrades Turkey's sovereign rating to B+ on tighter monetary policies

"Upgrade reflects increased confidence in the durability and effectiveness of policies implemented since the pivot in June 2023," Fitch said

Uncertain political situation in Pakistan poses threat to IMF deal: Fitch

Fitch further noted country's vulnerable external position meant that securing financing from multilateral and bilateral partners would an urgent issues on the agenda for the next govt

Rating agencies cautious on India's sovereign credit profile post-Budget

Fitch Ratings said that though the interim budget presented was broadly in line with the expectations, it won't change the sovereign credit profile from 'BBB-' with a stable outlook

Deficit reduction will stabilise debt-to-GDP ratio over medium term: Fitch

Fitch Ratings on Friday said the slightly faster pace of fiscal deficit reduction does not significantly change India's sovereign credit profile but the government's emphasis on deficit reduction will help to stabilise the debt-to-GDP ratio over the medium term. In a post budget commentary, Fitch Ratings Director, Sovereign Ratings, Jeremy Zook said over the next five years, India's government debt-to-GDP ratio would be broadly stable at just above 80 per cent of GDP. This is based on a continued path of gradual deficit reduction, as well as robust nominal growth of around 10.5 per cent of GDP. In the interim Budget 2024-25, presented in Parliament on Thursday, the government revised lower its current year fiscal deficit to 5.8 per cent from 5.9 per cent budgeted earlier. The deficit, which is the gap between the government's revenue and expenditure, will come down to 5.1 per cent in 2024-25 and further to 4.5 per cent by 2025-26. Fitch said this demonstrates a firm desire to adher

Fitch affirms India's long-term FX rating at 'BBB-' with stable outlook

'India is poised to remain one of the fastest-growing countries globally in the next few years as the robust economic momentum is proving resilient,' the ratings agency said

Fitch assigns 'BB(EXP)' rating to Shriram Finance's proposed US bonds issue

Global rating agency Fitch on Monday assigned the 'BB(EXP)' rating to Shriram Finance Limited's proposed US dollar-denominated senior secured bonds. 'BB(EXP)' rating reflects that an issuer has some risk of default but is still a safer investment compared to others. The final rating is subject to the receipt of final documentation conforming to information already received, Fitch Ratings said in a statement. Shriram Finance will issue the proposed bonds in the international market under the Reserve Bank of India's external commercial borrowing framework. The company will issue proposed bonds under the USD 3.5 billion global medium-term-note programme, which was updated on December 29, 2023. The proposed bonds will carry a fixed-rate coupon payable semi-annually and secured by a fixed charge over specified accounts receivable in line with the company's domestic secured bonds.

India's economic growth to boost demand of corporates: Fitch Ratings

Leading credit rating firm Fitch Ratings expects that India's resilient economic growth will boost demand of the corporates. In its latest research report on 'India Corporates: Sector Trends 2024', Fitch said that this is a sequel to the robust performance of the corporates in 2023 and will offset weakness from slowing growth in the key overseas markets. Rising demand and easing input cost pressure should boost margins of the corporates in the next financial year, Fitch said. Fitch said that with strong domestic demand growth, it is expected that India will be among the world's fastest-growing countries, with resilient GDP growth of 6.5 per cent during the fiscal 2024-25. This is despite a challenging global backdrop and the cumulative impact of the recent monetary tightening, it said. Sectors like cement, electricity and petroleum products are expected to witness a strong demand with high-frequency data in 2023 sustained well above pre-COVID pandemic levels. Fitch said that Indi

Better profitability to support corporate rating headroom: Fitch Ratings

Profit margins of domestic companies are likely to swell by 290 basis points over FY23 levels, boosted by lower raw material costs and rising volume led by local demand, despite faster capacity additions in some industries, which will lead to their rating upgrades next fiscal, says an international rating agency. In a report on the domestic corporates in particular and the economy in general, Fitch Ratings Friday said it seems the profit margins of the corporates it rates jumping by 290 bps above the FY23 levels. But it was quick to warn that a sharp or sustained rise in energy prices, given the ongoing geo-political risks, presents downside risks to the projection. On the economy, it expects the country to be among the world's fastest-growing large sovereigns, with resilient GDP growth of 6.5 per cent in FY25, marginally down from a likely 6.9 per cent GDP print this fiscal. The higher growth will be buoyed by strong demand for cement, electricity and petroleum products. This alon

Lok Sabha elections: Will Modi govt return to power in 2024? Fitch answers

Lok Sabha elections 2024: The agency said that the size of the majority in the next Indian Parliament could influence the ambitiousness of the administration's reform agenda

Fractious politics can slow reforms, derail policymaking: Fitch Ratings

Fractious politics can slow reforms and derail policymaking, and contentious elections can encourage the prioritisation of short-term growth, Fitch Ratings said on Monday as a large number of nations go to the polls. In its Global Sovereigns Outlook 2024, Fitch highlighted that a large number of elections are scheduled in 2024, including Bangladesh, Croatia, Dominican Republic, El Salvador, India, Indonesia, Korea, Mexico, Pakistan, Panama, Romania, South Africa, Sri Lanka, Taiwan and the US. UK elections must be before the end of January 2025. "Fractious politics can slow reforms and derail policymaking, and contentious elections can encourage the prioritisation of short-term growth objectives over longer-term structural initiatives," it said. Fitch said lower inflation might not help incumbents much, given prices remain well above pre-pandemic levels in most countries. The international environment is marred by two major conflicts entering 2024, neither of which appears to be on