Ratings firm Moody's has assigned a long-term moderate credit risk to Yes Bank's currency deposits with a stable outlook, on account of the private lender's strong financial performance and profitability.
"Yes Bank has been assigned a Baa3 long-term and Prime-3 short-term global local-currency deposit ratings by Moody’s. The outlook on all ratings is stable," the bank said in a statement.
The Baa3 rating is an investment grade rating and of moderate credit risk, while Prime-3 rated issuers are considered as having "an acceptable ability to repay short-term obligations".
Yes Bank said that as per Moody’s announcement, the rating reflects the private lender's growing business. It is currently India's fourth largest private-sector bank.
"This rating will enable the bank to further engage with top global counter-party banks, MNCs, international government agencies and allow us to raise international funding at even more competitive rates," Yes Bank Managing Director and CEO Rana Kapoor said.
According to Moody’s, Yes Bank's capitalisation is strong and it has a proven ability to raise fresh equity at regular intervals.
"The rating captures Yes Bank's strong financial performance, good profitability, strong risk management, which is demonstrated by its superior asset quality, low level of non-performing loans and high provisioning coverage," the statement said.
Going forward, Moody's expects Yes Bank to expand to have a chain of 750 branches by 2015, leading to increased economies of scale. The lender currently operates 125 branches across the country.