Moody\'s said on Wednesday it had downgraded the long term foreign and local currency issuer ratings of Dubai-based investment bank Shuaa Capital. The rating agency cut the ratings by one notch to Ba3 from Ba2 and placed them on review for further downgrade. Moody\'s said the decision to downgrade Shuaa\'s ratings reflected the investment bank\'s \"sustained and negative profitability, continued investment write downs, management instability and an increasingly difficult operating environment in their core sectors\". Moody\'s move comes despite strong capital and liquidity positions, as well as the appointment of new management to help restructure this business to profitability. Shuaa has reported losses for four consecutive years with the reported net loss for the nine month period ending September 2011 at AED182m. Moody\'s said the ongoing losses can be primarily attributed to reduced revenues from all business lines, multiple write downs on their investment book coupled with a very high cost base. It added that this was being tackled with the recent announced redundancy programme that should materially reduce operating costs once complete during the course of 2012. Moody\'s added: \"We expect the profitability to remain negative or weak for the near future as the business is being restructured to focus on profitable and sustainable franchises that will take time to build. \"We expect the commercial finance subsidiary to continue contributing the core of Shuaa\'s stable operating income going forward.\" Moody\'s said as more details of the new operating model, expected performance and ownership structure of Shuaa are disclosed, the rating will be re-positioned at a level \"more commensurate with the credit risk profile of the new institution\". Established in 1979, Shuaa is one of the oldest and leading investment banking institutions in the Gulf region. As of December 31 2010, Shuaa reported total consolidated assets of $523m under IFRS.