Shares of private lender YES Bank reported a jump of 11 percent from its intraday low on Thursday. It was higher by 8 percent from the previous close. The scrip has shown improvement despite a downgrade in the ratings.
India Ratings and Research slashed its long- and short-term issuer ratings. The rating agency lowered the lender’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, revealed that the liquidity position of the bank was adequate at end-September 2019. Due to lack of improvements on the capital side, the capacity of the bank to handle its asset and liability maturities might be analyzed 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,” added India Ratings and Research.
The lender is most likely to witness the balance sheet expansion challenges over the short-to-medium term, it revealed.