Yes Bank Limited (YBL) has received an upgraded rating from ICRA. The rating agency has cited the bank’s consistent operational growth and a decrease in stressed assets as the primary reasons for this upgrade.
What Happened: ICRA upgraded Yes Bank’s ratings on Friday, attributing it to the bank’s steady operational growth, improving loan mix, and a consistent decline in stressed assets. The agency also noted these factors would contribute to the stability of the bank’s earnings and capital position.
Here’s the table you requested, detailing the existing ratings, actions, and instruments involved:
| Instrument | Old Rating | Action |
|---|---|---|
| Basel III Tier II Bonds | [ICRA]A- (Positive) | Upgraded to [ICRA]A (Positive) |
| Basel II Upper Tier II Bonds | [ICRA]BBB+ (Positive) | Upgraded to [ICRA]A- (Positive) and withdrawn |
| Basel III Tier I Bonds | [ICRA]BB (Positive) | Upgraded to [ICRA]BB+ (Positive) and withdrawn |
| Basel III Tier I Bonds | [ICRA]D | Re-affirmed (These instruments were written down as part of the restructuring of liabilities) |
ICRA’s positive outlook continues to factor in the expectation that the private lender’s overall operational and financial performance will keep improving from the current levels. The ratings continue to be supported by adequate capitalisation and steady deposit growth, though the share of wholesale deposits remains high.
See Also: Elon Musk Congratulates PM Modi For ‘Being The Most Followed World Leader’
“YBL's loan book grew by 12.1% year-on-year (YoY) to ₹2.28 lakh crore, which was lower than the system average of 15.31% in FY2024,” the rating agency said in its report. It also highlighted the bank’s ability to scale up its loan book, granularise its deposit franchise further and improve its funding cost as key factors for further improvement in its profitability.
However, ICRA also pointed out that YBL’s below-average interest spreads, high funding costs and high share of low-yielding assets are leading to a weak cost-to-income ratio and operating profitability and return metrics.
Earlier in July, Moody's Ratings raised its outlook on the bank from stable to positive, indicating expected gradual improvements in the bank's performance. This was followed by a sharp rise in Yes Bank’s shares after the bank dismissed reports of a majority stake sale.
The lender is scheduled to post its earnings for the quarter ended June later today.
Read Next: Oil India Appoints Saloma Yomdo As New Director Of Exploration Development
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.