Moody’s Ratings has upgraded the long-term foreign and local currency deposit ratings and issuer rating of YES BANK to Ba1 from Ba2, citing improved credit metrics. The bank’s Baseline Credit Assessment (BCA) was also upgraded to ba2 from ba3. With a stable outlook, this upgrade reflects significant improvements in the bank’s asset quality, funding profile, and capital adequacy, alongside its strengthened governance and the strategic investment from Sumitomo Mitsui Banking Corporation.
Upgrade Reflects Financial Strengthening
As of May 11, 2026, YES BANK has received a credit rating upgrade from Moody’s Ratings. The bank’s long-term foreign currency and local currency deposit ratings, as well as its long-term foreign currency issuer rating, have all been raised to Ba1. Additionally, the bank’s Baseline Credit Assessment (BCA) improved to ba2, highlighting a more robust internal credit profile compared to previous periods.
Key Financial Improvements
The rating agency attributed the positive action to several core improvements in the bank’s operational health. Notably, the bank’s asset quality has seen material recovery, with the gross non-performing loan ratio declining to 1.3% as of March 2026. Furthermore, the bank’s funding profile has grown more resilient, with the share of retail and low-cost CASA deposits increasing to 35% of total deposits, up from 26% in 2021.
Capital and Strategic Growth
The bank’s capital position remains solid, with the Common Equity Tier 1 (CET1) capital ratio reaching 13.8% as of the end of March 2026, up from 13.6% the previous year. These gains were supported by internal capital generation. The integration of Sumitomo Mitsui Banking Corporation (SMBC) as a strategic investor, holding a 24.9% stake as of December 2025, has also bolstered the bank’s growth prospects and governance standards, earning a improved G-2 governance issuer profile score.
Future Outlook
The outlook on the bank’s ratings remains Stable. While net income to tangible assets improved to 0.7% for the fiscal year ending March 2026, the bank continues to focus on maintaining high provisioning standards ahead of future regulatory shifts, ensuring it remains well-positioned to manage potential risks associated with its growing loan book.
Source: BSE
