Yes Bank was upgraded to B2 from B3 with positive outlook by Moody’s on the back of an “expectation of a further improvement to the bank’s credit profile, driven by a cleanup of legacy stressed assets and/or improvements to its capital and profitability”. Moody’s adds that despite the significant challenges since the pandemic, Yes Bank’s asset quality has deteriorated only modestly while its capital has remained stable. Moody’s has also lowered government support assumption for Yes Bank to moderate from high, adding to the notch-up. Yes Bank’s deposit quality has improved with its CASA and retail term deposits at 45% end-September 2021 vs. only 31% in March 2020. A big plus was that its average liquidity coverage ratio (LCR) improved to 118% at end-September 2021 vs. 40% at end-March 2020. However its NPL ratio has only declined to 15% in September 2021 vs. 17% in March 2020 with its asset quality still weak. Yes Bank plans to transfer a large share of NPLs to an asset reconstruction company over the next 12 months.

Yes Bank’s USD 3.75% 2023s are stable at 99, yielding 4.59%.

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