Recently an important update has come out for the investors of Yes Bank. Global rating agency Moody’s Ratings has upgraded the bank’s ratings citing improvement in its credit profile and financial position.
Business News: An important development has come to light in the Indian banking sector regarding Yes Bank. Global credit rating agency Moody’s Ratings has upgraded the bank’s credit rating. The move reflects sustainable improvements in the bank’s financial position and operating performance. However, despite this positive news, Yes Bank’s stock remains under pressure in the stock market and is trading with a slight decline.
Big upgrade in rating, investors get relief
Moody’s has raised Yes Bank’s long-term foreign currency and local currency deposit ratings to Ba1 from Ba2. Along with this, the long-term foreign currency issuer rating of the bank has also been upgraded. Apart from this, the Baseline Credit Assessment (BCA) of the bank has been improved from ba3 to ba2. The agency has kept the outlook of the bank as ‘Stable’, which indicates that major fluctuations in the bank’s position are not expected in the coming time.
What are the reasons behind the improvement?
Moody’s has given several important reasons behind this upgrade, which point towards improvement in the financial health of the bank.
- Improvement in asset quality: There has been a continuous decline in the bank’s bad loans i.e. NPA. Yes Bank’s Gross Non-Performing Asset (GNPA) ratio has come down to around 1.3% by March 2026, which is much better than before.
- Strength in deposit base: The share of cheap and stable Retail Current Account Savings Account (CASA) in the total deposits of the bank has increased to 35%, which was only 26% in 2021. This has reduced the funding cost of the bank and increased its stability.
- Strong capital position: Yes Bank’s Common Equity Tier-1 (CET1) capital ratio has increased to 13.8% by March 2026, reflecting a strong capital position.
- Impact of strategic investment: Sumitomo Mitsui Banking Corporation (SMBC)’s 24.9% stake has strengthened the governance and strategic stability of the bank, thereby enhancing investor confidence.
Despite the news of rating upgrade, there was a slight decline in the shares of Yes Bank. Market experts believe that after the recent rise, profit booking is being done by investors. The stock had registered good gains in the last few sessions, after which this correction is being seen. Currently the stock is trading with a decline of about 1.7% and was seen trading at around Rs 22 level.
Comments are closed.