Private-lender
Yes Bank freezes at upper circuit limit on Wednesday after Brickwork Ratings upgrades the lender's Tier I Subordinated Perpetual Bonds (Basel II) ratings. Meanwhile, Brickwork withdraws rating of Upper Tier II Bonds (Basel II), Lower Tier II Bonds (Basel II) and Innovative Perpetual Debt Instruments (Basel II).
At around 10.43 am, Yes Bank was performing at the upper price band of Rs19.06 per piece up 9.98% on Sensex.
In its rating action, Brickwork said, "The rating upgrade factors in improvement in capitalisation ratios of the bank, strong shareholder base and experienced board members."
However, Brickwork also said, "The rating is however constrained by the weak asset quality, impacting the profitability and moderate resource profile of the bank."
According to Brickwork, the ability of the bank to maintain a retail and sustainable deposit base is a key monitorable. Also, the lender's ability of the bank to control slippages on account of COVID-19 related stress.
Yes Bank has managed to increase its deposits during H1 FY21 and stood at Rs135815cr as on 30 September 2020. Meanwhile, the lender's gross non-performing assets (NPAs) and net NPAs stood at 16.9% and 4.7% respectively as on 30 September 2020.