Yes Bank drops after Moody's places ratings under review

Yes Bank was down 2.80% to Rs 135.40 at 09:20 IST on the BSE after credit rating agency Moody's put the bank's ratings under review for downgrade.

The announcement was made after market hours yesterday, 11 June 2019.

Meanwhile, the S&P BSE Sensex was down by 141.25 points, or 0.35% to 39,809.21.

On the BSE, 3.84 lakh shares were traded in the counter so far compared with average daily volumes of 48.65 lakh shares in the past two weeks. The stock had hit a high of Rs. 137.05 and a low of Rs 135.15 so far during the day. It hit a 52-week high of Rs. 404 on 20 August 2018 and a 52-week low of Rs. 132.50 on 10 June 2019.

Moody's Investors Service has placed Yes Bank's foreign currency issuer rating of Ba1 under review for downgrade. Moody's has also placed the bank's long-term foreign and local currency bank deposit ratings of Ba1, foreign currency senior unsecured MTN program rating of (P)Ba1, and Baseline Credit Assessment (BCA) and adjusted BCA of ba2 under review for downgrade.

At the same time, Moody's has placed the bank's Counterparty Risk Assessment (CR Assessment) of Baa3(cr)/P-3(cr) and domestic and foreign currency counterparty risk rating (CRR) of Baa3/P-3 under review for downgrade. In addition, Moody's has affirmed the bank's short-term foreign and local currency bank deposit rating of NP.

The review for downgrade takes into account Moody's expectation that the ongoing liquidity pressures on Indian finance companies will negatively impact the credit profile of Yes Bank, given the bank's sizeable exposure to weaker companies in the sector. At the end of March 2019, Yes Bank's exposure to Indian housing finance companies (HFC) and non-bank finance companies (NBFC) represented 6.4% of its total exposure. In addition, Yes Bank had a 7% direct exposure to the commercial and residential real estate sector as of the same date, which is also under pressure, because liquidity conditions have worsened for the real estate sector, just like with the HFCs and NBFCs.

Yes Bank reported a net loss of Rs 1506.64 crore in Q4 March 2019 over a net profit of Rs 1179.44 crore in Q4 March 2018. The total income of the company rose by 17.1% to Rs 8388.23 crore during the stated period.

Yes Bank is a private sector bank. The Bank is engaged in providing banking services, including corporate and institutional banking, financial markets, investment banking, corporate finance, branch banking, business and transaction banking, and wealth management.

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