India Ratings and Research has maintained YES Bank’s long-term issuer rating of ‘IND A’ on Rating Watch Negative (RWN) and has withdrawn its short-term issuer rating of ‘IND A1’.

The agency has underlined that it continues to wait for more clarity on the bank’s capital-raising plans.

“The agency continues to await developments on YES Bank’s equity-raising, which, in the agency’s opinion, is critical for providing sufficient cushion to the possible credit cost impact from the stressed asset pool on regulatory capital requirement in the short- and medium-term,” said India Ratings.

The rating action is a follow-up of the rating rationale published by the agency on December 18, 2019, when it had said that the rating would be reviewed in January 2020.

“The agency has withdrawn the bank’s short-term rating since there is no outstanding against the same,” it further said. India Ratings said that the liquidity position of YES Bank, with a liquidity cover ratio of 114 per cent at the end of September 2019 seemed adequate, but in the absence of any swift capital-raise, its ability to manage its asset and liability maturities could get tested further.

Noting that the lender is in talks with various investors for raising capital, the agency said that it believes raising sizeable capital in the near term could be challenging and could require various regulatory and other approvals.

Accordingly, it will review the rating once again next month.

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