Global ratings agency Standard and Poor?s downgraded IDBI Bank on Monday, citing growing concerns about the bank?s asset quality, which is expected to remain weak over the next 12-18 months. The outlook on the rating is negative in line with India?s sovereign rating.
?We downgraded IDBI because we expect the bank?s asset quality to remain weak over the next 12-18 months,? said Standard & Poor’s credit analyst Amit Pandey. The bank?s senior debt was cut to ?BB+? from ?BBB-?, subordinated debt to ?BB-? from ?BB+?, and junior subordinated debt to ?B? from ?B+?.
The agency said that it expects the bank?s credit costs to stay high due to its weak credit quality. While the bank has grown cautiously over the past few years, its non-performing loans (NPLs) in the infrastructure loan book could rise, it noted.