ICRA says Yes Bank still requires up to Rs 13,000 cr in 1-2 yrs, upgrades various bond programmes

Even as Yes Bank's capital position has improved considerably after fund infusion under its reconstruction plan, it will require an additional Rs 9,000-Rs 13,000 crore in the next 1-2 years, ratings firm ICRA said on Wednesday.

After the equity infusion and write-down of the AT-I bonds, Yes Bank Ltd's (YBL) capital ratios are likely to improve, with common equity tier-1 (CET-1) and tier-1 at 7.6 and 7.8 per cent, respectively, and capital-to-risk weighted assets ratio (CRAR) of more than 9 per cent, ICRA said in a release.

"As the regulatory norms require banks to maintain a CCB (capital conservation buffer) of 2.5 per cent as on March 31, 2020, ICRA expects additional capital requirements of nearly Rs 9,000-Rs 13,000 crore over the next1-2 years," the ratings firm said.

However, the bank has not paid a coupon, which was due on the Basel-II Tier-1 Bonds on March 5, 2020, as the same is subject to approval from the Reserve Bank of India (RBI).

The ratings firm has upgraded various bond programmes of Yes Bank and has placed a ratings watch on them with developing implications.

On the ratings upgrade rationale, it said ICRA has factored in the removal of moratorium on the bank on March 18, infusion of a Rs 10,000-crore equity capital, reconstitution of a new board and write-down of additional tier-1 bonds.

"ICRA derives comfort from the new shareholding and the reconstitution of the bank's board. Along with the equity infusion of Rs 10,000 crore, YBL's Basel-III Additional Tier-1 (AT-I) Bonds of Rs 8,415 crore have been written down.

"This has helped improve the Tier-1 capital ratios above the regulatory requirements (excluding CCBs)."