No Material Impact Of YES Bank Crisis On Shriram Transport Finance: S&P
Money & Banking
PTI
|
Updated on
March 09, 2020
Published on
March 09, 2020
S&P Global Ratings on Monday said Shriram Transport Finance Company (STFC) will not be materially affected by the troubles at YES Bank as the firm’s exposure is currently less than 0.5 per cent of its net worth. Earlier in the day, STFC said it has a small exposure of ₹50 crore to Yes Bank’s hybrid securities in the form of upper Tier II bonds. The finance company had made this investment in 2010.
YES Bank has been placed under a moratorium by the RBI and withdrawals have been capped. In a reconstruction plan of the bank, government-owned SBI is likely to pick up 49 per cent stake in the troubled bank.
“S&P Global Ratings believes STFC’s low exposure to Yes Bank’s hybrid securities will shield its financial profile. STFC does not hold any Additional Tier 1 (AT1) capital instruments of the bank,” the rating agency said in a release.
“Only AT1 instruments are currently envisaged to be permanently written down,” it said.
However, even if STFC is required to make provision for 100 per cent credit loss on this exposure, it will not materially affect its capitalisation given the exposure is currently less than 0.5 per cent of its net worth, it said.
“But we believe other finance companies holding Yes Bank’s hybrid securities in their treasury investments could see credit losses,” said S&P.
The agency further said it continues to see risk of a potential deterioration in STFC’s asset quality over the next few quarters.
Slower economic growth and weaker economic activity in India could lower vehicle utilisation, affecting the cash flows of road transport operators.
Published on
March 09, 2020
PTI
|
Updated on
S&P Global Ratings on Monday said Shriram Transport Finance Company (STFC) will not be materially affected by the troubles at YES Bank as the firm’s exposure is currently less than 0.5 per cent of its net worth. Earlier in the day, STFC said it has a small exposure of ₹50 crore to Yes Bank’s hybrid securities in the form of upper Tier II bonds. The finance company had made this investment in 2010.
YES Bank has been placed under a moratorium by the RBI and withdrawals have been capped. In a reconstruction plan of the bank, government-owned SBI is likely to pick up 49 per cent stake in the troubled bank.
“S&P Global Ratings believes STFC’s low exposure to Yes Bank’s hybrid securities will shield its financial profile. STFC does not hold any Additional Tier 1 (AT1) capital instruments of the bank,” the rating agency said in a release.
“Only AT1 instruments are currently envisaged to be permanently written down,” it said.
However, even if STFC is required to make provision for 100 per cent credit loss on this exposure, it will not materially affect its capitalisation given the exposure is currently less than 0.5 per cent of its net worth, it said.
“But we believe other finance companies holding Yes Bank’s hybrid securities in their treasury investments could see credit losses,” said S&P.
The agency further said it continues to see risk of a potential deterioration in STFC’s asset quality over the next few quarters.
Slower economic growth and weaker economic activity in India could lower vehicle utilisation, affecting the cash flows of road transport operators.
Published on
USAA Remembers And Honors Americas Fallen Service Members With The Return Of The Poppy Wall Of Honor To The National Mall
600,000 poppies displayed in a powerful tribute to the true meaning of Memorial Day Read more
USAA Educational Foundation Study Reveals How Cost Of Living Pressures And Predictable Outlays Are Straining Military Family Finances, While Highlighting Some Progress
High spouse unemployment and financial burdens among young military and veterans cited as pain points, limiting gains in... Read more
USAA 2025 Annual Report Reflects A Year Of Strength, Service And Commitment To Members
USAA’s financial strength in 2025 enabled record return of $3.8 billion to members and hundreds of millions in financi... Read more
United Through Reading And USAA Partner For Month Of The Military Child Employee Engagement Series
United Through Reading (UTR) and USAA are proud to announce a series of employee engagement events in honor of the Month... Read more
USAA Selects Chris Curtin As Chief Marketing Officer To Advance Value-Driven Brand Leadership
Feb 27 2026 SAN ANTONIO — February 27, 2026 — USAA today announced that Chris Curtin... Read more
USAA Puts Money Back In Members Pockets With Ways To Save, Strengthen Budgets
Association is Reducing Auto Premiums, Offering No-Interest Government Shutdown Loans, and Returning a Historic $3.8 Bil... Read more