Rating agency CARE has upgraded the rating for YES Bank’s tier-II bonds and infrastructure bonds from “BBB” to “BBB+” on stabilisation of operations, growth in business and continued improvement in profitability. The ratings continue to factor in the improvement in the credit profile of the bank post the implementation of the reconstruction scheme for the private sector lender, CARE said in a statement.
In March 2020, Reserve Bank of India, with approval from the government, crafted a reconstruction scheme to protect depositors’ money, provide capital support, liquidity support and reconstitute the Board for better governance.
There has been steady growth in the deposit base including in current asset and savings account deposits of the bank. There is a shift towards retail lending and granularization of advances profile and improvement in liquidity profile of the bank. However, the ratings continue to remain constrained on account of weak asset quality parameters. There is concentrated exposure to certain stressed corporate groups and bank witnessed slippages in the retail and MSME advances on account Covid-19 induced lockdowns.
