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YES Bank jumps 3% as ICRA finds liquidity adequate

The rating agency maintained most of the ratings on YES Bank’s bonds.

ETMarkets.com|
Updated: Nov 14, 2019, 03.47 PM IST
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Reuters
YES-bank---Reuters-1
ICRA said the bank's liquidity coverage ratio (LCR) stood at 113.83 per cent in Q2FY20 compared with the RBI’s requirement of 100 per cent as on January 1, 2019.
NEW DELHI: Private sector lender YES Bank advanced 3 per cent in Thursday’s trade after ICRA said the bank has adequate liquidity for now. The rating agency maintained most of the ratings on YES Bank’s bonds.

ICRA said the bank's liquidity coverage ratio (LCR) stood at 113.83 per cent in Q2FY20 compared with the RBI’s requirement of 100 per cent as on January 1, 2019.

“ICRA draws comfort from the bank’s access to call money markets and the RBI’s marginal standing facility mechanism in case of an urgent liquidity requirement,” the rating agency said.

That said, the weakened asset quality and profitability meant the bank’s ability to retain and rollover deposits will remain critical to the liquidity.

The Moody’s controlled rating agency said the pace of resolution and reduction in stressed assets remains slow and continues to be a credit negative.

YES Bank reported an increase in its stock of stressed assets as reflected by a jump in net NPA. The bank’s standard BB and below rated exposure stood at Rs 41,157 crore as on September, up from Rs 36,353 crore as on June 30.

ICRA said the binding term-sheet received by YES Bank for equity infusion of $1.2 billion from an investor is a positive.

"With sizeable net NPAs and standard BB and below rated exposures, the outlook on the ratings remains negative", it said.

ICRA said that despite the proposed capital raise by the bank, its ability to resolve its stressed exposures in a timely manner will remain a key driver of its asset quality, profitability and solvency and will hence be a rating driver.

The rating agency had earlier downgraded its long-term ratings on YES Bank, on July 24, 2019, and had kept them on a negative outlook.

The shares of YES Bank closed 0.73 per cent higher at Rs 68.75 on BSE.

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