Icra downgrades IDBI’s medium-term ratings

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Mumbai, Oct 15: Investment Information and Credit Rating Agency (Icra) on Monday revised Industrial Development Bank of India (IDBI)’s long and medium-term ratings to “LAA+” and “MAA+”, indicating high safety from “LAAA” and “MAAA”, indicating highest safety. The revision in ratings is due to concerns on IDBI’s asset quality and pressures on profitability. Icra noted with concern the vulnerability of IDBI’s asset quality, primarily attributed to significant exposures in various commodity sectors like steel, textile and chemicals. Delayed economic recovery and sustained pressure on commodity prices could impair IDBI’s asset quality further. While IDBI’s management is focussed on improving the situation and arresting further slippages through emphasis on restructiong and resolving problem loans, achieving success will be challenging given the difficult external environment. IDBI’s non-performing assets (NPAs) increased to Rs 8,371 crore as on March 31, 2001, compared with Rs 7,675 crore in the corresponding period the previous year. However, IDBI’s short-term rating of “A1+”, indicating highest safety has been retained.