Fitch rates Development Credit D/E

Fitch Ratings said it assigned a D/E individual rating and a 5 support rating to Development Credit Bank Ltd. and affirmed the bank's national long-term rating and Rs. 1.6 billion of subordinated debt at A-.

The outlook was changed to stable from evolving.

The agency said the change in outlook reflects Development Credit Bank's improved capitalization. An aggressive reduction of legacy non-performing loans through recoveries and write-offs has resulted in a significant decline in gross non-performing loans to 4.28% at the end of June, and the bank's Rs. 1.86 billion initial public offering in 2007 and Rs. 2.8 billion issue of equity to institutional investors in August have boosted capital levels and is expected to help fund growth over the next 12 months.

The ratings remain constrained by the bank's small size, limited franchise, weak profitability and the evolving nature of its business strategy, Fitch said.

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