Yes Bank Shares Fall 5% on ICRA Downgrades

Yes Bank Shares fell as much as 5 per cent on Monday, after credit ratings agency ICRA lowered its ratings on the private sector lender's long-term bonds. On the National Stock Exchange (NSE), the Yes Bank share price declined 5.03 per cent to Rs. 167.05 at the day's weakest point, compared to its previous close of Rs. 175.90. On the Bombay Stock Exchange (BSE), the Yes Bank stock fell 4.73 per cent to hit an intraday low of Rs. 167.30 apiece, as against its previous close of Rs. 175.60.


Shares of YES Bank Looked on course to break their two-day winning run after the domestic rating agency Icra NSE 0.20 % downgraded the bank's long-term bond ratings and guided for a negative outlook. Icra downgraded the ratings on six instruments totaling borrowings over Rs 33,000 crore by the lender, after it had last week reported a surge in BB and below-rated advances in the March quarter to 7.1 per cent under a new chief executive Ranveer Gill. The rating action comes after the agency placed the ratings under watch with negative implications last November, after the Reserve Bank refused to let YES Bank's promoter-chief executive Rana Kapoor to continue beyond January 31, citing corporate governance and other concerns, which ultimately led to Gill's appointment in March. 

"With a sizable increase in the share of BB and below-rated advances and the weakened capital cushions, rating outlook remains negative," Icra said.

The bank had also reported its maiden loss of over Rs 1,506 crore in the March quarter, driven by a near ten-fold spike in provisions.


The agency said the rating action also factors in a further weakening of its core equity capital cushions because of the voluntary provisions and the Rs 1,506-crore loss in the March quarter.


"The ability to reduce low-rated advances and improve the CET-I capital cushion along with diversifying the advances and liabilities will result in a change in the outlook to stable from negative," it added.


Last month, Yes Bank reported a net loss of Rs. 1,506 crore for the quarter ended March 31, as against a profit of Rs. 1,179 crore for the corresponding period a year ago as provisions soared over nine-times. For the full financial year, the private sector bank reported a profit of Rs. 1,720 crore as against Rs. 4,224 crore in FY18. 


At 12:50 pm, Yes Bank shares traded 4.01 per cent lower at Rs. 168.85 apiece on the NSE, underperforming the benchmark Nifty index which was down 0.75 per cent.

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