The ratings agency cited the private lender's classification of about Rs 10,000 crore of its exposures, representing 4.1 per cent of its total loans, under the watchlist which could translate into non-performing loans over the next 12 months.
Furthermore, UBS expects more asset-quality pressure on YES Bank
than consensus, given the bank’s higher exposure to stressed corporates and lower recognition of these loans as gross non-performing loans. The brokerage firm has ‘Sell’ rating on the stock with the price target of Rs 90 per share.
“The bank’s credit growth might get affected as 'repair' work would involve significant rise in credit cost and could worsen given the lack of equity capital. Positive stock trigger would be fresh capital infusion from private equity (PE) funds, which would instill confidence in new management,” analysts at Elara Capital said in the company update.
At 02:43 pm, YES Bank
was trading 3 per cent lower at Rs 96 on the BSE, against a 0.26 per cent rise in the Sensex. A combined 93 million shares changed hands on the counter on the BSE and NSE so far.