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In a reassuring signal to investors and stakeholders, Moody’s Investors Service has affirmed the long-term deposit rating of ICICI Bank UK PLC at Baa1, maintaining a stable outlook. The announcement, made on September 13, 2025, underscores the bank’s resilient financial profile, strong affiliate support, and sound risk management practices amid evolving global economic conditions.
ICICI Bank UK PLC, a wholly owned subsidiary of ICICI Bank Limited, continues to demonstrate a robust credit standing in the UK banking sector. The reaffirmation of its rating reflects Moody’s confidence in the bank’s ability to meet its financial obligations and maintain operational stability.
Key Highlights from Moody’s Rating Action
ICICI Bank UK PLC’s long-term local currency deposit rating remains at Baa1.
The outlook is stable, indicating no expected changes in the rating over the medium term.
The rating reflects a combination of the bank’s standalone credit strength and the high likelihood of support from its parent, ICICI Bank Limited.
Moody’s also factors in the bank’s favorable loss-given-failure analysis, which contributes to the rating uplift.
Understanding the Rating Components
Baseline Credit Assessment (BCA)
Moody’s assigns ICICI Bank UK a ba2 BCA, which evaluates the bank’s intrinsic financial strength without external support.
This reflects moderate asset quality, adequate capital buffers, and stable funding sources.
Adjusted BCA and Affiliate Support
The rating benefits from a one-notch uplift due to the very high probability of support from ICICI Bank Limited, rated Baa3.
This results in a ba1 Adjusted BCA, acknowledging the strategic importance of the UK subsidiary to the parent bank’s global operations.
Loss-Given-Failure (LGF) Analysis
Moody’s applies a forward-looking LGF framework, which adds three notches of uplift to the rating.
This reflects the bank’s liability structure and the likelihood of recoveries in the event of default.
Strategic Importance and Market Position
ICICI Bank UK PLC plays a key role in ICICI Group’s international footprint, offering retail, corporate, and investment banking services across Europe.
The bank has maintained a conservative lending profile, focusing on risk-adjusted returns and compliance with UK regulatory standards.
Its deposit base remains stable, supported by diversified funding and prudent liquidity management.
Implications for Stakeholders
The reaffirmed Baa1 rating assures depositors and investors of the bank’s ability to honor its commitments.
A stable outlook suggests Moody’s does not foresee material deterioration in the bank’s credit profile in the near term.
The rating supports the bank’s access to capital markets and enhances its credibility in cross-border transactions.
Broader Context and Industry Trends
The affirmation comes amid a cautious global banking environment, with institutions navigating inflationary pressures, interest rate shifts, and regulatory changes.
Indian banks operating abroad are under increased scrutiny, making Moody’s endorsement particularly significant.
ICICI Bank UK’s performance reflects the broader strength of Indian banking institutions expanding internationally with disciplined governance.
Conclusion
Moody’s decision to affirm ICICI Bank UK PLC’s Baa1 deposit rating with a stable outlook is a testament to the bank’s sound financial health and strategic alignment with its parent institution. As global markets continue to evolve, the rating provides a foundation of trust and stability for customers, partners, and investors alike. ICICI Bank UK remains well-positioned to navigate future challenges while contributing to the global ambitions of the ICICI Group.
Sources: Cbonds, Futunn News
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