Yes Bank Rating Boost: Moody’s Upgrades to Ba2
Moody’s Upgrades Yes Bank’s Credit Rating
Moody’s Ratings has lifted Yes Bank’s long-term foreign and local currency bank deposit ratings. The ratings have gone up from Ba3 to Ba2. This upgrade shows a steady improvement in the bank’s overall credit profile.
Key Improvements Noted by Moody’s
- Improved capital adequacy
- Stronger loss-absorption buffers
- Enhanced profitability and funding metrics
Moody’s explained that the upgrade is due to the bank’s improving credit profile. This includes better capital and loan loss reserves. These improvements provide strong buffers against potential asset risks.
Better Asset Quality
Yes Bank’s gross non-performing loan (NPL) ratio has dropped significantly. It fell from 13.9% in March 2022 to just 1.6% in March 2025. Also, the provision coverage as a proportion of NPLs has improved. It increased from 71% to 80%. This shows stronger asset quality buffers.
Current Risks and Challenges
Despite these gains, Moody’s noted that Yes Bank still faces some risks. These include:
- Fast growth into retail and SME segments
- More focus on higher-risk retail lending
- Dependence on third-party sourcing for loan origination
Government Support and Future Outlook
The Ba2 deposit ratings are one notch above the bank’s BCA of ba3. This is due to the expectation of moderate systemic support from the Government of India. The government has a sovereign rating of Baa3 with a stable outlook.
Cleaner Balance Sheet and Better Governance
Yes Bank has made significant progress since its reconstruction in 2020. The bank has undertaken a series of balance sheet clean-ups and governance reforms. These changes followed a Reserve Bank of India-led rescue plan. The plan was backed by a group of Indian banks.
