Credit rating agency ICRA has downgraded long term rating of IDFC First Bank's bond programme due to weak earnings and on higher provisions due to stressed exposures. The rating agency downgraded Rs 38,670 crore of non convertible debentures (NCDs) to AA from AA+ with a stable outlook.
The downgrade considers the bank's weak earnings profile, given the elevated cost-to-income ratio because of the ongoing branch expansion, which has been pressurising the operating profitability, and an increase in credit provisions on account of unanticipated fresh stressed exposures identified by it in Q4 FY19.
IDFC First Bank provides a range of financial solutions to individuals, small businesses and corporates.
