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28
November 2018
 |
Yes Bank (The Total Investment & Insurance Solutions)
Credit
ratings agency A Moody's Investors Service on Tuesday downgraded Yes Bank's
foreign currency issuer rating to 'Ba1 from Baa3'.
According
to the agency, the developments around leadership transition as well as the
governance issues are credit negative.
"Moody's
has also downgraded the bank's foreign and local currency bank deposit ratings
to 'Ba1/NP from Baa3/Prime-3' and foreign currency senior unsecured MTN program
rating to '(P)Ba1 from (P)Baa3'," the agency said in a statement. The Total Investment & Insurance Solutions
Further,
Moody's downgraded Yes Bank's baseline credit assessment (BCA) and adjusted BCA
to 'ba2 from ba1'. The Total Investment & Insurance
Solutions
"The
rating action considers the resignation of various members of the bank's Board
of Directors -- which, when seen in conjunction with the Reserve Bank of
India's (RBI) directive in September 2018 to restrict the term of the bank's MD
and CEO as well as founder, Mr. Rana Kapoor, till 31 January, 2019 -- has
raised Moody's concerns over corporate governance," the statement said.
"In
Moody's opinion, although the bank's reported credit fundamentals remain
stable, the developments surrounding the transition in leadership as well as
the governance issues are credit negative because they complicate management's
effective implementation of the bank's long-term strategy."
Furthermore,
the ratings agency said that developments could constrain the bank's ability to
raise new capital.The Total Investment & Insurance
Solutions
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