Yes bank

(Parag) #246

Yes Bank has raised Rs 3000cr through the issuance of bonds.


  • Company has money in hand now for fund expansion


  • The cost of funds is 9.5, which is not cheap.
    -Demonetization has increased company’s CASA . I think this quarters could be one of the best for CASA growth, in line with the overall banking industry.

With half of the money they wanted to raise through QIP few months back, I think the bank would not be very keen on another QIP, which is the good the news as well as bad news.
The good news in a sense that equity won’t be diluted.

Bad news - Current Book value of the company is 385 and with $1 billion at 1300-1500 range would make the book value to approximately 500. So the current price of 1100-1200 does not look expensive.

Can someone shed light on business implication for Yes Bank raising 3000cr in the mid to long term?

(yudiagg) #247

Cost of funds at 9.5% appears to be very expensive when we expect interest rate on housing loans to be under 9% in 2017. Unable to comprehend.

Disclosure: invested since long.

(Parag) #248

There is no market mayhem, which is causing them to raise money desperately. They have enough money for growth for next few quarters. Plus current demonization will provide them decent CASA for growth.

I feel what have they raised money at 9.5?


Thanks to RBI that we know something what many were aware and used to discuss off the record. UBS was ahead of curve in analysing MCA data to bring out true state of affairs. Many dismissed these reports as alarmist etc.

And yes I will not allow a lady to get legitimate due by joining a board since doing a scam is so manly thing.

(pkk123) #250

Though you must congratulate them for the timing of their QIP.


Absolutely! they are still the smartest in the town. Despite the revelation their NPA is better than any other corporate focused Pvt bank. It is also because their credit appraisal is still fairly centralised unlike HDFC.

(Tarun) #252

Strange case of same auditor behind two NPA divergent banks.

Good homework by the journalist…

(Deepak Venkatesh) #253


Yes bank extends credit line to Myntra.


(Deepak Venkatesh) #254


“The bank’s digital transformation exercise is also underway, with a greater degree of automation and digitisation, aimed at better productivity and cost efficiency, and customer service,” the bank said. “This will additionally aid in rationalising some redundancies. It will be our constant endeavour to further digitise the bank operations.”

“The greatest threat that the banking sector is facing is obsolescence risk of all physical assets like branches, ATMs, cards, point of sale terminals etc. Hence, our expansion must be prudent and under control,” Kapoor wrote in an email to his top management

This is what we were talking on the RBL thread for banks moving consumers to their phones to bank with them.

Fintech is coming!


(Dazzled beginner) #255

Just thinking out aloud with a little bit of skepticism…
Assuming 2500 jobs are being cut and they were being paid around anywhere between 10000 to 50,000 per month … The annual amount saved may be 24 crores to upto 150 crores… Short term steroid effect to boost the pat??.. If so then the growth achieved through this will be short lived…
Last years pat was 3500 crores… 150 crores will amount to roughly 5% of last years pat…
Disc: invested since 767 levels ( face value 10)…hope my holding period in yes bank will roughly equal buffets favourite holding period…:grin:

(manivannan.g) #256

In my portfolio I have NBFC: Ujjivan (avg: 330), Manappuram (avg:104), HF: GIC (avg:307). Since I wanted to add a banking scrip to my portfolio for a longterm I’m considering “Yes bank”. The only hindrance is the valuation. Is it still OK to enter at this valuation ?

(Susindar) #257

Although PE is a little outside my comfort level, I find this stock the cheapest available new age private sector bank as compared to Kotak, Indusind, RBL etc.

Disclosure: invested at an average price of Rs316. Added more at Rs360.

(Pramod) #258

RBI penalises Yes Bank & IDFC Bank for violations

Penalty was for non-compliance with RBI directions on Income Recognition Asset Classification (IRAC) norms and delayed reporting of information security incident involving ATMs of the bank

Disclosure: Invested in Yes bank ( 7.25 % of my portfolio )

(Pramod) #259

(Susindar) #260

This quarter will be a big test for Yes Bank with Axis bank reporting poor numbers. Whether Yes Bank warrants rerating will depend on the NPA slippages for the quarter. Hoping for a good quarter as advance tax numbers were good.

(manivannan.g) #261

Yes bank has posted good result (net profit raised 25.1% YoY), but overshadowed by NPA, which has jumped to 1.82 per cent from 0.97. Something concerning !

(Susindar) #262

Divergences are shocking again. This is my biggest concern. We had this issue of Yes Bank under reporting for last year. I thought they would have learnt from mistakes and did the right thing this year. But it is quiet bad under reporting by Rs6,000Crs. As per correct provisions, last year profit was only Rs2000cr rather than the reported Rs3.2kCrs. Based on this, the PE is 35 now and the perception on the management has taken a beating as well.

(Yogesh Sane) #263

Out of a total divergence of 6355 Cr in gross NPA, 1690 Cr have already been repaid and another 2984 Cr have been upgraded as standard on account of satisfactory performance within six months of RBI calling it as non-performing.

Upgrades are done by the bank so RBI can still come back and call it non-performing. I guess this will go on. What’s more important to watch is the net repayment of 1690 Cr. To me Yes bank was right in classifying these as standard in March 2017 since these were fully repaid within six months. Still 1219 Cr worth of loans were classified as NPA so to that extent Yes bank under-reported bad loans.

What is concerning is that whether an account is performing or non-performing should be like black and white. There should not be so much divergence between regulator and bank. May be that’s what RBI is saying while Yes Bank is trying to avoid volatility in NPA numbers from quarter to quarter.

Axis also reported divergence but Yes Bank had a far higher divergence in % terms. With NPA above 1% of assets, Yes Bank is no longer in the league of HDFC Bank and IndusInd Bank in terms of asset quality.

Disc: Invested.

(Susindar) #264

You are right. There should be no reasons for divergences between regulator and banks. While Kotak Mahindra Bank with a GNPA / NNPA of 2.59 / 1.25 is bigger than Yes Bank, they reported zero divergence. While Yes Bank reported lower NPA, most of us would not trust their numbers. Management is loosing credibility. Perhaps this separates wheat from chaff!


The original research was done by UBS which was ahead of curve in calling YB’s NPA bluff. They maintain 160 target expecting acceleration in recognition of NPA going forward.