Rating agency India Ratings and Research has assigned Yes Bank ltd’s proposed Rs 3.3 billion of Infrastructure bonds an ‘IND AA+’ rating with a stable outlook
“The stable outlook reflects agncy’s expectation that any deterioration in Yes Bank’s asset quality will be adequately absorbed by its operating profits without any impairment in its Tier 1 capitalisation (September 2016: Tier 1 ratio of 10.1 per cent), said the agency
The ratings also factor in the agency’s expectation that the bank would maintain above average core capitalisation on an ongoing basis in line with its higher rated private sector peers.
Yes Bank’s proportion of bulk funding is higher than that of better rated peers though the bank’s concentration on deposit side has shown an improving trend. However, the bank runs an asset-liability tenor gap on account of a lower share of the current account and saving account deposit ratio than larger peers, it added.