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Yes Bank Shares Fall 5% After ICRA Downgrades Lender's Bonds

On the BSE, Yes Bank shares fell 4.73 per cent to hit an intraday low of Rs 167.30 apiece, as against their previous close of Rs 175.60.

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Yes Bank Shares Fall 5% After ICRA Downgrades Lender's Bonds

Share price of Yes Bank today: The stock was on course to close lower on Monday, after two days of gain


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.

In a statement last Friday, ICRA said the rating for Yes Bank's Basel III-Compliant AT-I bonds was lowered two notches than its Basel III-Compliant Tier II bonds.

Explaining the rationale behind the downgrade, ICRA said: “With a sizeable increase in the share of BB and below rated advances and the weakened capital cushions, the outlook on the ratings remains 'Negative'. The bank's ability to resolve these advances in a timely manner will remain a key driver of its asset quality, profitability and capital position.” 

Instruments with the “BB” rating are considered to have moderate risk of default regarding timely servicing of financial obligations, according to ICRA.

The share of "BB" and below advances stood at 7.1 per cent of its advances as on March 31, 2019, ICRA noted. Conversely, the ratings could be downgraded if the BB and below rated advances increases or recoveries are limited, resulting in higher-than-expected credit provisioning, ICRA said in its statement.

It also said that the bank's “inability to improve capital cushion or granularise the advances and liabilities will be a credit negative”.

The credit ratings agency had earlier downgraded the long-term ratings of Yes Bank in November last year. 

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. 

On the BSE, Yes Bank shares closed 5.30 per cent lower at Rs 166.30.



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