Moody's downgrades IDBI Bank

Moody's Investors Service said it downgraded IDBI Bank Ltd.'s local- and foreign-currency bank deposit ratings to B1 from Ba2.

Moody's also said it downgraded the foreign-currency senior unsecured rating of IDBI and its Dubai International Financial Centre branch to B1 from Ba2.

The agency also said it downgraded the foreign-currency senior unsecured medium-term notes rating on IDBI and its DIFC branch to provisional B1 from provisional Ba2.

Moody's also said it confirmed the bank's baseline credit assessment and adjusted baseline credit assessment at Caa1.

The agency also said it downgraded the counterparty risk assessment for both IDBI and its DIFC branch to Ba3(cr) from Ba1(cr).

The outlook also was revised to stable.

This action concludes a review for downgrade that began in May.

The downgrades were driven by a reduction in the amount of extraordinary government support incorporated into the bank's ratings and its weak standalone credit profile, the agency said.

Since May 2017, when Moody's initiated its review for downgrade, the bank has received Rs. 18.6 billion of new equity from the government and Rs. 3.9 billion of new equity from the Life Insurance Corp. of India, Moody's explained.

Nevertheless, the bank remains significantly undercapitalized, the agency said.

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