Ind-Ra revises rating watch on YES Bank to 'evolving' from 'negative'

Yes Bank on Thursday said that India Ratings and Research (Ind-Ra) has revised rating watch on the bank's long-term issuer rating of 'IND BB-' to rating watch evolving (RWE) from rating watch negative (RWN).

The RWE indicates the possibility of the ratings being either upgraded, downgraded or affirmed.

"Ind-Ra has revised the rating watch on Yes Bank Ltd's long-term issuer rating of 'IND BB-' to RWE from RWN," Yes Bank said in a filing to the BSE.

The revision of the rating watch follows the systemic support Yes Bank has received recently, in terms of both equity and liquidity, from the new set of investors and the regulator for its reconstruction.

It also considers the pressure that could show up on the liabilities once the regulator-imposed moratorium is lifted.

Ind-Ra had downgraded the bank's ratings and maintained them on RWN on March 6, 2020; in the agency's opinion, the temporary regulator-imposed moratorium resulted in the bank not being able to follow through with settlement and transaction requests, the filing said.

Subsequently, the bank declared its third quarter results.

Its gross non-performing assets (NPAs) increased to 18.87 per cent in 3QFY20 from 7.39 per cent in 2QFY20 while its net NPAs grew to 5.97 per cent from 4.35 per cent.

"This implies the additional recognition of Rs 230 billion as non-performing till the time of publishing the 3QFY20 results and not just end-December 2019. Including this, the total stressed book including non-fund limits to the same accounts is about Rs 490 billion," the filing said.

The Reserve Bank of India (RBI) had put restriction on the lender on March 5, under which the bank''s customers were allowed to withdraw up to Rs 50,000 till April 3.

The government notified the Yes Bank reconstruction scheme last week.