Mumbai: Rating agency ICRANSE -0.24 % on Tuesday downgraded the long-term rating of private lender IDFC First Bank on the back of weak earnings profile and increase in provisions due to unanticipated fresh stressed exposures identified by the bank. The ratings was bought down a notch from to AA from AA+ with stable outlook.
The agency also said that the ongoing branch expansion by the lender had led to elevated cost-to-income ratio and was pressuring profitability. The bank had reported ..
“The ability to resolve some of these exposures will be a driver of the associated credit costs and profitability in FY2020,” ICRA said in a statement. “We estimate that IDFC First’s return on assets may remain muted in FY2020 due to the ongoing investments in the expansion of the retail franchise and possible credit provisions on stressed exposures.”
The agency also said that the ongoing branch expansion by the lender had led to elevated cost-to-income ratio and was pressuring profitability. The bank had reported ..
“The ability to resolve some of these exposures will be a driver of the associated credit costs and profitability in FY2020,” ICRA said in a statement. “We estimate that IDFC First’s return on assets may remain muted in FY2020 due to the ongoing investments in the expansion of the retail franchise and possible credit provisions on stressed exposures.”
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