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Yes Bank share price falls 5% on rating downgrade

The rating downgrade necessarily factors in the bank’s higher levels of slippages to NPAs in Q1 and Q2 and its expectation to continue at similar high levels for the ensuing two quarters of FY20, Brickwork explained in its rating rationale.

December 26, 2019 / 02:50 PM IST
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Yes Bank share price fell 5 percent intraday on December 26 on the back of rating downgrade by Brickwork Ratings. The latter has downgraded rating of the bank’s lower tier II bonds from BWR AA- to BWR A.

It also downgraded ratings of its upper tier II bonds, hybrid tier I bonds and innovative perpetual debt instruments from BWR A+ to BWR A-. Moreover, its outlook continues to remain negative.

The rating downgrade necessarily factors in the bank’s higher levels of slippages to non-performing assets (NPAs) in Q1 (Rs 6230 crore) and Q2 (Rs 5,950 crore) and its expectation to continue at similar high levels for the ensuing two quarters of FY20, Brickwork explained in its rating rationale.

Also, the bank’s substantial exposure to sensitive sectors, groups and accounts; uncertainties over raising adequate capital; and maintaining the capital adequacy ratios above the minimum regulatory requirement as of March 31, 2020 are the other key constraints.

The rating agency said its outlook will continue to remain as negative considering the risk of continuing weakness in asset quality and will monitor the capital raising plans of the bank to provide a cushion to absorb any increase in risk weighted assets and assist in credit growth.

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At 13:32 hrs Yes Bank was quoting at Rs 49.60, down Rs 1.60, or 3.13 percent on the NSE.
Moneycontrol News
first published: Dec 26, 2019 10:59 am

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