A day after credit rating agency CARE upgraded the rating for YES Bank’s tier II Bonds and infrastructure bonds from BBB to BBB+, the shares of YES Bank has surged as much as 11 per cent.
At 12:06 pm, Yes Bank was up 6.60 per cent at Rs 15.66.
Notably, CARE upgraded YES Bank’s ratings in the credit profile of the bank. In March 2020, the Reserve Bank of India and the government had crafted a reconstruction scheme for the bank, after the bank’s financial discrepancies came to light.
According to a report by Business Standard, the banks’ current asset and savings accounts continue to steadily grow, as well as, there is an improvement in the liquidity profile of the bank.
However, weak asset quality parameters continue to be a constraint for the bank.
According to the report, “CARE said Basel III compliant tier-II Bonds are characterized by a Point of Non-Viability (PONV) trigger due to which the investor may suffer a loss of principal. PONV is a point at which any bank may no longer remain a going concern on its own unless steps are taken to revive operations and to continue it as a going concern. The Reserve Bank of India will determine PONV.”
