Moody’s Ratings has affirmed ICICI Bank’s Baa3 long-term deposit ratings and baa3 Baseline Credit Assessment (BCA). The rating affirmation, announced on December 2, 2025, reflects expectations that the bank’s diversified loan portfolio and strong solvency will support internal capital generation. ICICI’s funding and liquidity continue to be credit strengths, with funding sourced from retail deposits. The outlook remains stable.
Ratings Rationale
The ratings affirmation with a stable outlook reflects the expectation that ICICI’s diversified loan portfolio and above-industry-average profitability will support internal capital generation and its strong solvency. ICICI’s access to low-cost deposits and holdings of liquid government securities are key supports for funding and liquidity.
Key Strengths
ICICI’s healthy net interest margin (NIM), diversified non-interest income, and operational efficiencies support profitability. Return on assets for the six months ended September 2025 (Q2) was 2%, compared with the industry average of 1.4% for fiscal year 2025.
Asset Quality
ICICI’s gross nonperforming loan (NPL) ratio as of the end of September 2025 was 1.6%, compared with the industry average of 2.3% as of the end of March 2025. Stable employment conditions support the quality of secured retail loans.
Capitalization and Funding
ICICI’s consolidated Common Equity Tier 1 ratio as of the end of September 2025 was 16.1%. Most of the bank’s funding is sourced from retail deposits.
Factors That Could Affect Ratings
An upgrade to ICICI’s deposit ratings and BCA is unlikely because they are at the same level as India’s sovereign rating.
A downgrade of ICICI’s deposit ratings could occur if the BCA is lowered by more than one notch. This could be triggered if tangible common equity/risk-weighted assets ratio decreases to below 12%, problem loans/gross loans (NPL ratio) exceed 6%, and net income/tangible assets falls below 0.4%.
Source: BSE
