YES Bank shares extend gains, climb further today; here's what triggered the move

Shares of YES Bank Ltd continued their upward movement for the second consecutive session on Tuesday. The stock rose 0.75 per cent to hit a day high of Rs 20.14. It was last seen up 0.35 per cent at Rs 20.06. At this price, the scrip has shed 4.43 per cent year-to-date (YTD).

Technically, the private lender's counter traded lower than the 30-day and 50-day simple moving averages (SMAs) but higher than the 5-day, 10-, 20-, 100-, 150-day and 200-day SMAs. Its 14-day relative strength index (RSI) came at 49.17. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The scrip has a price-to-earnings (P/E) ratio of 29.51 against a price-to-book (P/B) value of 1.36. Earnings per share (EPS) stood at 0.68 with a return on equity (RoE) of 4.57. According to Trendlyne data, YES Bank has a one-year beta of 1, indicating average volatility.

Today's upmove in the share price came after credit rating agency ICRA upgraded or reaffirmed its ratings on the bank's infrastructure and Basel III bonds worth Rs 24,460.80 crore. The rating for the Infrastructure Bonds and Basel III Tier II Bonds has been upgraded to ICRA AA-/Stable.

ICRA stated that the upgrade reflects the steady expansion in YES Bank's scale of operations, the improving loan book composition with a higher share of granular loans, and a continued reduction in the pool of stressed assets — all contributing to enhanced earnings and capital stability.

"ICRA also notes the consistent recoveries from security receipts (SRs), which supported an improvement in the bank's overall profitability. While these recoveries are expected to moderate, they should continue to aid profitability in the near term. Meanwhile, the bank is also focusing on strengthening its core operating profitability for long-term, sustainable growth. ICRA further highlights the planned stake acquisition by Sumitomo Mitsui Banking Corporation (SMBC)," the agency added.

Once regulatory approvals are in place, SMBC will become the single largest shareholder in YES Bank. ICRA said the ratings are further supported by the bank's adequate capitalisation and steady deposit growth, though the share of wholesale deposits remains relatively high.

The bank's vulnerable book -- including 31-90 day overdue and standard restructured loans -- declined to 10 per cent of the overall core capital as of March 31, 2025, compared to 21.2 per cent a year earlier. However, this segment continues to warrant monitoring.

"With a shrinking pool of stressed assets, YES Bank's gross slippage rate has declined, and coupled with recoveries, this has resulted in lower net credit costs. That said, the ratings continue to reflect the below-average interest spreads due to high funding costs, the drag from low-yielding assets (particularly those deployed towards meeting priority sector lending shortfalls), and a high cost-to-income ratio. These factors weigh on the bank's operating profitability and return metrics. While deposit growth has been commendable, the proportion of corporate/wholesale deposits remains elevated," ICRA noted.