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YES Bank drops 3%: Here’s why

Shares of YES Bank skidded 3 per cent on Thursday after India Ratings and Research downgraded its long- and short-term issuer ratings. The rating agency downgraded the bank’s long-term issuer rating to ‘IND A’ from ‘IND A+’ and its short-term issuer rating to ‘IND A1’ from ‘IND A1+’.

It, however, said liquidity position of the bank seemed adequate at end-September 2019. In the absence of improvements on the capital side, the ability of the bank to manage its asset and liability maturities might be tested further, it added.

“The downgrade reflects the inadequate progress as per Ind-Ra’s expectations with respect to the quantum and pace of equity infusions, which is critical for providing sufficient cushion for the credit cost impact of the stressed asset pool,” India Ratings and Research said. The bank is likely to face balance sheet expansion challenges over the short-to-medium term, it added.

At 11.37 am, the stock traded 2.46 per cent lower at Rs 45.60.

Source: Economic Times