Moody’s upgrades Yes Bank by a notch following capital raise
1 min read . Updated: 04 Aug 2020, 06:30 AM ISTAccording to Moody’s, Yes Bank’s funding and liquidity have moderately improved in Q2 of 2020
MUMBAI : Rating agency Moody’s on Monday upgraded private sector lender Yes Bank’s long-term foreign currency issuer rating by one notch from Caa1 to B3, citing the bank’s recent success in raising capital.
“The outlook on Yes Bank’s ratings where applicable is changed to stable from positive," said Moody’s. The bank had recently raised ₹15,000 crore, bolstering its capital adequacy ratios.
Moody’s also upgraded the bank’s long-term foreign and local currency deposit ratings from Caa1 to B3 and its foreign currency senior unsecured MTN programme rating from (P)Caa1 to (P)B3.
Moody’s also upgraded Yes Bank’s long-term local and foreign currency Counterparty Risk Ratings and long-term Counterparty Risk Assessment from Caa1 to B3 and from Caa1(cr) to B3(cr), respectively. “The successful equity raising showcases Yes Bank’s regained access to external market funds, which is a result of its improving financial strength and will support depositor confidence," Moody’s said.
Following the capital raise, Yes Bank’s common equity tier 1 ratio will more than double from 6.6% to 13.4% based on the bank’s capital position at the end of June, bringing its capitalization largely in line with its private sector peers.
The significantly improved solvency ratio, Moody’s said, strengthens Yes Bank’s resilience to potential asset quality risks from the impact of the economic slowdown and coronavirus-related disruptions on India’s economy. According to Moody’s, Yes Bank’s funding and liquidity have moderately improved in the second quarter of 2020, though they are still weaker than a year ago.
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