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YES Bank share price falls after Moody's puts lender's rating on review for downgrade

BusinessToday.In     June 12, 2019

YES Bank share price fell in early trade today after Moody's placed the bank's ratings on review for downgrade. YES Bank share price lost over 3% to 135.10 in early trade compared to the previous close of 139.30 on BSE.  

YES Bank share opened 2.08% lower at 136.40 in early trade today. YES Bank share was the top loser on Sensex today. 

YES Bank share has lost 58.94% during the last one year and fallen 24.90% since the beginning of this year.

12 of 41 brokerages rate the stock "buy" or 'outperform', 11 "hold", seven "underperform" and 11 "sell", according to analysts' recommendations tracked by Reuters.

On Tuesday, global rating agency Moody's Investors Service placed YES Bank's foreign currency issuer rating of Ba1 under review for downgrade, citing the private lender's sizeable exposure to finance companies.

"Moody's has also placed the bank's long-term foreign and local currency bank deposit ratings of Ba1, foreign currency senior unsecured MTN program rating of (P)Ba1, and Baseline Credit Assessment (BCA) and adjusted BCA of ba2 under review for downgrade," the rating agency said in a report.

According to the agency, the ongoing liquidity pressures on Indian finance companies will negatively impact the credit profile of YES Bank, given the bank's sizeable exposure to weaker companies in the sector.

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As on March 31, 2019, YES Bank's exposure to Indian housing finance companies (HFC) and non-banking finance companies (NBFC) was 6.4 per cent of its total exposure.

In addition, YES Bank had a 7 per cent direct exposure to the commercial and residential real estate sector, which is also under pressure, as liquidity conditions have worsened for the real estate sector, just like with the HFCs and NBFCs, Moody's said.

In a fresh development, Lt Gen Mukesh Sabharwal has resigned as Non-Executive Independent Director, Yes Bank said in an exchange filing. The bank has proposed his re-appointment until April 24, 2020, but Sabharwal wanted to spend time on academic pursuits and hence has tendered his resignation, it added.

On Tuesday, YES Bank shares closed at Rs 139.30 apiece, up 2.50 per cent, on the Bombay Stock Exchange.

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