The overhang of Investec Bank's reliance on loans to property developers in the 2005 to 2008 period led to a decision by Moody's Investors Service yesterday to cut the credit rating on the bank in Australia.Moody's said it cut Investec Bank (Australia) Limited's (IBAL) long-term senior unsecured ratings to Baa3 from Baa2. Moody's cut the bank's financial strength rating to D+ from C-.The short-term ratings were lowered to Prime-3 from Prime-2, Moody's said.While Investec is two years into a business restructure that is producing more non-interest income than interest income, and is also steering its new lending towards financing professionals (such as dentists), Moody's now considers that the drag on profitability from the legacy assets warrants a cut in the credit rating.Alan Chonowitz, the chief financial officer at Investec, wrote in an email that "the credit quality of loans written during the past two years has been significantly upgraded and we remain focused to work through earlier legacy impairments on loans written from 2005 to 2008."Chonowitz noted that the bank last reported a liquidity ratio of 29 per cent, with a capital ratio of 16.4 per cent and tier-one ratio of 13.5 per cent.In May, Investec reported a pre-tax profit of A$2.1 million for the year to March 2011, down from $30.2 million the previous year. Operating profit before impairments was $61.1 million, compared with $81.5 million for the previous year.