Business Standard

Ind-Ra downgrades Yes Bank's long-term issuer ratings with outlook negative


India Ratings and Research (Ind-Ra) on Saturday downgraded Yes Bank Ltd's long-term issuer rating to IND A plus from IND AA minus with negative outlook.
The agency affirmed India's fourth largest private sector bank's short-term issuer rating at IND A1 plus.
"The downgrade reflects inadequate progress as per Ind-Ra's expectations on the pace of resolutions on certain stressed assets that it has exposures to, and lower-than-expected quantum of fund raised even after considering recent qualified institutional placement (QIP) of Rs 1,930crore."
Ind-Ra also factors in the likely growth challenges the bank will face over the short-to-medium term as it implements new strategies, the overhang of stressed assets and resultant credit costs.
In the near term, Ind-Ra expects certain standard stressed group exposures of the bank to slip into the non-performing category.
The need to accelerate provisions beyond Rs 2,100 crore of contingent provisions in FY19 and credit cost guidance of 1.25 per cent for FY20 in the event of inadequate or delayed resolution of these assets can keep the operating buffers under constant pressure.
The negative outlook reflects the downside risks to the agency's estimates of profitability and capital buffers that could further emanate from substantial delays in the resolution of certain stressed assets and potential material delays in equity infusions, said Ind-Ra.

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First Published: Aug 31 2019 | 2:56 PM IST

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