YES Bank: Good news for lender post AT1 bonds write-off shock

YES Bank share price: As YES Bank shareholders attempt recovery from the shock of the Supreme Court setting aside YES Bank's Rs 8415 crore Additional Tier-1 (AT1) bonds write-off decision, the lender has a good news for investors.

The private sector lender on Tuesday said Moody's Ratings (Moody's) has affirmed its  long-term (LT) foreign currency (FC) and local currency (LC) bank deposit ratings at Ba1, as well as affirmed its Baseline Credit Assessment (BCA) and Adjusted BCA at ba2.

The global ratings agency also affirmed its long-term (LT) foreign currency (FC) issuer rating at Ba1, LT FC and LC Counterparty Risk Ratings (CRR) at Ba1, LT Counterparty Risk (CR) Assessment at Ba1(cr), as well as the senior unsecured medium-term note program rating at (P)Ba1.

The credit ratings agency affirmed the Not Prime (NP) short-term (ST) FC and LC bank deposit ratings as well as NP ST FC and LC CRR and NP(cr) ST CR Assessment.

The credit rating agency's affirmation reflects expectation that the bank will maintain its overall credit profile despite the decline in its Common Equity Tier 1 (CET1) ratio following the Supreme Court ruling invalidating the writedown of its additional tier 1 (AT1) securities in 2020.

The impact of the lower CET1 ratio is decreased by the positive trends in the bank's financial metrics, including improving funding, asset quality and profitability.

"The Ba1 deposit ratings are one notch above the bank's ba2 BCA, reflecting our expectation of a moderate likelihood of support from the Government of India (Baa3 stable) in times of need," said Moody's.

However, YES Bank stock ended 3.14% lower at Rs 16.36 on Wednesday. Market cap of the bank fell to Rs 51,352 crore. Total 197.92 lakh shares of the bank changed hands amounting to a turnover of Rs 32.48 crore.