Yes Bank rose 2.42% to Rs 12.27 after the global credit ratings agency Moody's Investors Service upgraded the bank's long-term foreign currency issuer rating to B3 from Caa1.
Moody's has also upgraded the bank's long-term foreign and local currency bank deposit ratings to B3 fromCaa1, and its foreign currency senior unsecured MTN program rating to (P)B3 from (P)Caa1.
In addition, Moody's has upgraded the bank's long-term local and foreign currency Counter party Risk Ratings (CRR) and long-term Counter party Risk (CR) Assessment to B3 from Caa1 and B3(cr) from Caa1(cr) respectively.
At the same time, Moody's has upgraded Yes Bank's Baseline Credit Assessment (BCA) and Adjusted BCA to Caa2 from Ca. The outlook on Yes Bank's ratings where applicable is changed to stable from positive.
Moody's said that Yes Bank's successful equity capital raise of Rs 15000 crore (about $2 billion) has bolstered its solvency and is the main driver of the ratings upgrade. The successful equity raising showcases Yes Bank's regained access to external market funds, which is a result of its improving financial strength and will support depositor confidence.
However, Yes Bank continues to face the risk of a further deterioration in asset quality in light of the ongoing economic disruption caused by the coronavirus outbreak. About 40%-45% of the bank's loans were under are payment moratorium as of mid-April 2020. Any further deterioration in asset quality will strain the bank's already weak profitability.
Yes Bank's net profit tumbled 60.1% to Rs 45 crore in Q1 FY21 from Rs 114 crore in Q1 FY20. However, the bank has returned to profitability after reporting loss in the past three quarters. It had reported a net loss of Rs 3,668 crore in Q4 FY20.
Total income of the bank fell 32.8% on a year-on-year (YoY) basis to Rs 6,106.74 crore in the June 2020 quarter. Net Interest Margin (NIM) stood at 3% in Q1 FY21 as against 2.8% in Q1 FY20.
Yes Bank is a full service commercial bank' providing a complete range of products, services and technology driven digital offerings, catering to corporate, MSME & retail customers.
Powered by Capital Market - Live News
Disclaimer: No Business Standard Journalist was involved in creation of this content
