Fitch cuts IndusInd Bank bonds to BBB+(ind)

Fitch Ratings said it downgraded IndusInd Bank Ltd.'s the ratings on its Rs.3.08 billion upper tier 2 bonds to BBB+(ind) from A-(minus)(ind), and affirmed its national long-term rating at A(ind), Rs.5.516 billion lower tier 2 debt at A(ind), national short-term rating at F1(ind) and Rs2.5 billion certificates of deposit program at F1(ind).

The ratings reflect the initiatives taken by its new management to mitigate the structural mismatch in its asset-liability profile, which had led financials to deteriorate significantly between 2006 and 2008, Fitch said.

The bank is gradually diversifying its loan portfolio, limiting the proportion of its fixed-rate loans and growing its retail liability franchise to remedy the mismatch, the agency said.

But the bank's performance remains more vulnerable to interest-rate volatility than other Indian banks and its financials remain weak, Fitch added.

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