International rating agency Moody's has upgraded the rating of Yes Bank to Ba2 from Ba3, and has changed its outlook to 'stable' due to improvement in its credit profile. The firm has also upgraded the private lender's baseline credit assessment to ba3 from b1.
"YES Bank's 'Ba2' deposit ratings are one notch above its 'ba3' BCA (baseline credit assessment) based on our expectation of a moderate likelihood of support from the government of India ('Baa3'stable) in times of need," Moody's said.
Earlier during the day, Yes Bank announced that the Reserve Bank of India (RBI) has approved a six-month extension for the lender's managing director and chief executive officer Prashant Kumar, effective October 6, or until a new MD and CEO takes charge.
The extension comes as the Mumbai-based bank has launched the search for a new CEO and is engaging with global recruitment firms. Kumar’s three-year tenure as Yes Bank’s chief runs out in October.
In May, Japan's Sumitomo Mitsui Banking Corp (SMBC) entered into a definitive agreement to acquire a 20 percent stake in Yes Bank through a secondary stake purchase of 13.19 percent from State Bank of India and 6.81 percent aggregate from other banks for Rs 13,483 crore at Rs 21.5 apiece.
SBI will sell the stake for Rs 8,889 crore, while the other banks together will sell for Rs 4,594 crore. The other banks include Axis Bank, Bandhan Bank, Federal Bank, HDFC Bank, ICICI Bank, IDFC First Bank and Kotak Mahindra Bank.
The shares of the company closed 0.88 percent lower at Rs 20.24 apiece.
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