Rating agency Fitch has downgraded IDBI Bank's individual rating to 'D' from 'C/D' and also its Rs 1,500-crore Upper Tier-II subordinated bond programme to 'AA-(ind)' from 'AA(ind)'. The performance of the Mumbai-based public sector bank may continue to lag behind its peers longer than expected due to the deterioration in its credit cycle, the agency said. Even though the bank's non-performing asset ratios improved significantly after bad loans worth Rs 9,000 crore were transferred to a trust in FY04, the current economic slowdown could impact the bank's corporate loan portfolio. Some project loans had to be restructured in the past and could impact asset quality again in the present downturn, Fitch said in its rating review. IDBI's net interest margins have gradually improved, but are likely to remain the lowest amongst domestic banks for the next one to two years due its small base of low-cost deposits.