Moody's Upgrade Reflects Yes Bank's Improving Credit Profile

Moody's Ratings upgraded Yes Bank's deposit ratings due to enhanced credit profile and better asset management. Improved capital and loan loss reserves are creating buffers against risks, despite challenges in retail and SME portfolios. Government support is expected if needed.

Moody's Ratings has upgraded Yes Bank's long-term foreign and local currency deposit ratings from Ba3 to Ba2. This decision follows a gradual improvement in the bank's credit profile over recent months.

The upgrade also reflects an increase in the bank's Baseline Credit Assessment to ba3 from b1, signifying better capital management and loan loss reserves. These enhancements provide needed buffers against unseasoned asset risks.

Despite the positive trends, Yes Bank's asset quality still faces challenges from rapid expansion in retail and SME sectors. The bank's non-performing loan ratio has improved, falling to 1.6% from 13.9% in March 2022, although it remains vulnerable due to increased focus on higher-risk retail segments and third-party channels.