Shares of Yes Bank rose 4.7% after CRISIL upgraded its rating on the lender’s certificates of deposit (CDs) to A2+.
At 01:05 pm, shares of Yes Bank traded at ₹14.97 apiece, up 1.8% from its previous close, while the benchmark Sensex was up 0.9% at 39473.10.
Yes Bank on Thursday said that CRISIL has upgraded its rating on the bank’s ₹20,000 crore certificates of deposit (CD) to A2+ from A2. The rating agency also reaffirmed its ‘BBB/Stable’ rating on the bank’s Tier-II bonds (under Basel III) and infrastructure bonds.
Crisil said the upgrade in the short term rating reflects improvement in the funding and liquidity profile of the bank, with gradual increase in its deposit base as well as sizeable capital raised recently. With this, Yes Bank has repaid ₹35,000 crore of the ₹50,000 crore special liquidity facility availed from the Reserve Bank of India (RBI) in March 2020, which is ahead of the earlier plan. Further, the bank’s liquidity coverage ratio (LCR) has improved in recent months.
Ratings continued to be underpinned by the expectation of continued extraordinary systemic support from key stakeholders and sizeable ownership by the State Bank of India (SBI).
Yes Bank’s net profit tumbled 60.1% to ₹45 crore in the June ended quarter of this fiscal from ₹114 crore a year ago. However, the bank returned to profitability last quarter after reporting losses in the past three quarters. It had reported a net loss of ₹3,668 crore in Q4 FY20.
Net interest income (NII) fell 16.3% to ₹1,908 crore in Q1 June 2020 from ₹2,281 crore in Q1 June 2019, while net interest margin (NIM) stood at 3% in Q1 FY21 as against 2.8% i a year ago.