CRISIL Upgrades Yes Bank’s Infrastructure and Tier II Bonds, Reaffirms Deposits Rating

CRISIL Upgrades Yes Bank’s Infrastructure and Tier II Bonds, Reaffirms Deposits Rating​

CRISIL Ratings has upgraded Yes Bank Limited's long-term rating for its infrastructure bonds and Tier II bonds under Basel III, while reaffirming the short-term rating on Certificates of Deposits (CD). The rating action reflects improvements in the bank's credit profile, sustained profitability, and a strengthened liability franchise.

The ratings were assessed based on combining the business and financial risk profiles of Yes Bank and its subsidiary, Yes Securities (India) Ltd., taking into account the expected support from its single largest shareholder, Sumitomo Mitsui Banking Corporation (SMBC).

Rating Action Details​

CRISIL Ratings upgraded the long-term rating for both infrastructure bonds and Tier II bonds to 'Crisil AA+/Stable' from 'Crisil AA-/Stable'. The short-term rating on Certificates of Deposits was reaffirmed at 'Crisil A1+'.

The key instruments subject to this rating action are detailed below:

Financial and Operational Strengths​

The rating rationale highlighted consistent improvements in Yes Bank's earnings profile, asset quality, and liability structure. The bank reported a Profit After Tax (PAT) of Rs 3,476 crore (RoA of 0.8%) for fiscal 2026, up from Rs 2,406 crore (RoA of 0.6%) in the preceding fiscal year. For the first quarter of fiscal 2027, PAT was reported at Rs 1,071 crore, achieving a Return on Assets (RoA) of 0.9%.

Net Interest Margin (NIM) remained steady at 2.2% of average total assets in fiscal 2026 and improved to 2.4% on an annualized basis in the first quarter of fiscal 2027. This stability was supported by the bank’s ability to reduce its cost of deposits, while facing a falling interest rate environment.

The asset quality metrics showed marginal improvements during fiscal 2026. Gross Non-Performing Assets (NPA) declined to 1.3% as of March 31, 2026, down from 1.6% in fiscal 2025. Slippages improved marginally across the reporting periods.

In terms of liabilities, the bank’s deposit base stabilized and grew over the last five fiscals. As of June 30, 2026, total deposits increased to Rs 3,15,373 crore, marking a year-on-year growth of approximately 14%. The CASA ratio (Current Account Savings Account) stood at 32.7% as of June 30, 2026.

Strategic Importance and Capital Position​

The strong credit profile is supported by the strategic importance of Yes Bank to Sumitomo Mitsui Banking Corporation (SMBC). SMBC acquired a stake in Yes Bank via secondary purchases in September 2025, subsequently increasing its holding to 24.9% by December 2025.

CRISIL Ratings noted that the collaboration framework with SMBC is expected to provide benefits through potential business synergies, particularly in the wholesale banking segment, and access to SMBC's global and Indian network.

The bank maintains a comfortable capital position. As of June 30, 2026, Yes Bank recorded CET 1 and Overall Capital Adequacy Ratios (CAR) of 14.0% and 15.1%, respectively. The bank holds a net worth of Rs 52,338 crore as of June 30, 2026.

Key Financial Indicators Snapshot​

The following table summarizes key financial indicators for Yes Bank Limited (standalone) across the specified periods:

Rating Outlook and Risks​

CRISIL Ratings maintained a Stable outlook, projecting that Yes Bank will continue to receive strong financial, managerial, operational, and strategic support from SMBC.

The rating agency identified two primary sensitivity factors:

• Upward Factors: Increased strategic importance of the bank to SMBC (e.g., shareholding exceeding 50% or enhanced linkages) and sustained improvement in profitability above a 1.5% RoA.
• Downward Factors: Significant reduction in SMBC's shareholding or any deterioration in asset quality leading to RoA remaining below 0.6%.

YESBANK Stock Price Movement​

On Tuesday, shares of Yes Bank Limited settled flat, posting a zero percent change and closing at ₹23.00. The stock experienced robust trading activity, with 41.67 million shares changing hands during the session.