The Indian Wire » Banking » After brief gain on Yesterday due to Change in Moody’s ratings , shares of Yes Bank Slipped By 1%
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After brief gain on Yesterday due to Change in Moody’s ratings , shares of Yes Bank Slipped By 1%


Yes Bank’s shares slipped by about 1% on Thursday morning despite the recent positive change in the outlook by the Moody’s Investor Services. Earlier Yesterday, Moody’s changed the outlook from negative to stable and also affirmed Ba1 rating to the private lender.

The change in rating and status by Moody’s is due to recent developments including the Nil Divergence report by the Central Bank and stable financial performance by private lender, Moody’s said.

On Wednesday, Boosted by positive ratings, shares of Yes Bank gained as much as 3.45% to hit an intra-day high of 219.80, before closing at 217.90 levels, up 2.57 per cent, on the Bombay Stock Exchange. Today shares slipped about 1% in morning.

“The report observes NIL divergences in the bank’s asset classification and provisioning from the RBI norms,” the Yes Bank said in a statement on 13 February.

Couple of days later RBI issued a statement and rebuked Yes Bank for disclosing ”Confidential” risk assessment report or the so called No-Divergence report.

RBI said, the disclosure of divergence report amounts to violation of banking norms and Yes Bank has intentionally revealed them to mislead public.

”The press release(by Yes Bank) breaches confidentiality and violates regulatory guidelines. Moreover, NIL divergence is not an achievement to be published and is only compliance with the extant Income Recognition and Asset Classification norms,” RBI said

As part of its supervisory process, the central bank assess the compliance report by the private lender with extant prudential norms on income recognition, asset classification and provisioning (IRACP). The divergence is the disparity between the report filed by private lender and the RBI’s inspection report. RBI has cleared Yes bank of any divergence in asset classification and provisioning for FY 2017-18.

In a report filed it FY 2016, Yes bank reported its gross NPA around 748.98 Crore, which as per the central bank was at 4,925.68 Crore leading to a divergence in the report. This divergence further surged to 6,335 Crore and is said to be the primary reason behind RBI ‘s decision for not allowing former CEO Rana Kapoor for a second term.

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