India's Yes Bank AT-1 ruling won't impact ratings despite earnings hit, S&P says
Yes Bank secured new business in a quarterly results development.
· ET Stocks, Economic Times Markets
Yes Bank faced a setback as India's Supreme Court overturned its write-off of 84 billion rupees in bonds. S&P Global Ratings stated the ruling would not impact its credit rating of the bank. The decision highlights procedural errors in the 2020 write-down process, which regulators had supported. Despite this ruling, Yes Bank is expected to maintain adequate capitalization in the future.
The analysis
Against that, the stock is -2.6% on the day at ₹17.65, and has returned -23.2% over three months. It sits 31% below its 52-week high, which means a good deal of bad news was already in the price. The banks sector has moved -4.0% over the same period, so Yes Bank is running 19.2 points behind its peers.
For Yes Bank, the question is how much of this is already reflected in the price and how much re-rates the banks peer set alongside it.
Why it matters
- Earnings versus expectations is what actually re-rates a stock; the surprise matters more than the absolute number.
Market context
- The company directly in focus is YESBANK.
- Sector exposure: Banks.
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