Moody’s Ratings has upgraded Yes Bank’s long-term foreign currency and local currency bank deposit ratings to Ba2 from Ba3. The agency has also upgraded the baseline credit assessment (BCA) and adjusted it to ba3 from b1. The outlook on the bank has been changed to stable from positive.
The ratings upgrade was driven by a gradual improvement in the credit profile, including capital and loan-loss reserves which would provide sufficient buffers against the bank’s unseasoned asset risks and improving-yet-modest profitability and funding, Moody’s said in a release.
“Yes Bank’s Ba2 deposit ratings are one notch above its ba3 BCA based on our expectation of a moderate likelihood of support from the Government of India (Baa3 stable) in times of need,” the rating agency said.
The agency also said the bank’s continued improvement in the ability to meet the Reserve Bank of India’s priority sector lending norms would support its profitability. “Yes Bank’s profitability is weaker than Indian peers we rate and remains the banks’ key credit challenge,” Moody’s said.
Shares of Yes Bank on Friday closed 0.88% lower at Rs 20.24 on the National Stock Exchange.