The rating agency has also downgraded the bank's long-term foreign and local currency bank deposit ratings to B2 from Ba3
Shares of Yes Bank shed more than 10 percent intraday on December 6 after Moody's downgraded the bank's ratings and assigned a negative outlook.
Moody's Investors Service has downgraded the company's long-term foreign currency issuer rating to B2 from Ba3, as per a BSE release.
The rating agency has also downgraded the bank's long-term foreign and local currency bank deposit ratings to B2 from Ba3, foreign currency senior unsecured MTN program rating to (P)B2 from (P)Ba3, and baseline credit assessment (BCA) and adjusted BCA to b3 from b1.
However, it kept outlook on the bank's ratings as negative.
The downgrade of deposit and senior unsecured program ratings takes into account Moody's expectation that the bank's pool of potential stressed assets and low loss absorbing buffers against those assets will add pressure to its funding and liquidity, creating additional risks to its standalone credit profile or BCA, Moody's said.
Moody's expects bank's common equity tier 1 (CET1) ratio of 8.7 percent at the end of September to come under significant pressure, unless the bank can raise new capital in the next few quarters.
The rating actions reflect Moody's view that Yes Bank's funding and liquidity compares weakly to other rated private sector peers in India, and could come under pressure, if the bank cannot strengthen its solvency in the next few quarters, it added.At 15:24 hrs Yes Bank was quoting at Rs 55.50, down Rs 6.60, or 10.63 percent on the BSE.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.