Does anybody have the latest concall transcript for Yes Bank? Has it happened for Q119?
Press Release Q1FY19_Crores.pdf (491.7 KB)
Attached …it’s having all most all details that you might be looking for .
It’s not concall transcript though…
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Notice from YES Bank to the Exchanges:
We wish to inform you that the Bank has received the RBI’ s approval that Shri Rana Kapoor may continue as Managing Director & CEO of YES Bank till further notice from RBI.
RBI is giving some serious kicking to banks, public or private. According to the article below, RBI is pulling up Yes Bank in this fashion for the reported divergence in NPAs declared: 2000 crores declared vs 8300 crores as per RBI for FY 17.
But I also read in another recent article: “…given that most of the accounts were already repaid, sold to ARC or upgraded as standard on account of satisfactory account conduct, the overall impact of the divergence was reduced to Rs 1,219 crore (classified as NPA) then. In the March quarter, higher repayment on these accounts or sales to ARCs, has further watered down the impact to a much lower Rs 485 crore…”
Why is then the central bank harassing Mr. Rana Kapoor still? Is there really lack of clarity on his future at the bank over NPA divergence issue or is something else working in the background?
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I think RBI is just “punishing” Yes Bank and Rana Kapoor for the divergences.
My problem is, they should either accept him for 3 years or reject him, before the dead line. It is unfair to let the uncertainty carry on by saying “approved till further notice”. Now there is no time frame in picture at all!
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Point taken, markets do not appreciate uncertainty. But we also need to look at the wording of the previous term extension letters. Besides, ‘until further notice’ could also mean the next three years.
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What was the exact wording of RBI’s communication last time ?
Hi All,
I have been following the Yes bank stock recently.
I understand that there is huge amount of difference in ‘Amount of NPA’ reported by yes bank and ‘Amount of NPA’ reported by RBI for Yes Bank
Is this the only factor which is keeping the Yes bank at a cheap P/B compared to the other private banks? Please help me out seniors @investr
I have also heard very good things about the management of Yes Bank, which I believe is the most important factor for any company(considering my bad experiences) .
So am planning to invest in Yes Bank and wish to add in further dips
It can also mean end in case of next meaningful divergence…
Regards
રાહુલ ગિરીશ શાહ
Rahul Girish Shah
To the contrary, I think this news could be good in the interest in the long-term banks as Yes Bank will take extreme caution and show conservativeness (hopefully!) for declaring NPA. RBI is acting as a strict head teacher for banks.
Divergence is bringing it head again for Yes Bank, but differently. Mr Kapoor is on a cautionary note (e.g. warning letter), and he has to follow a very tight rope. I am sure YB may have inking and thought of this possibility. They had three-four quarters to clean up their book last year, which is a reasonable timeframe to correct the book IMO. Of course, it is not possible to fix the book entirely, but still, it is a reasonable timeframe.
YB is aiming for another fundraising in the next 4-6 quarters (my guess), so the uncertainty won’t help. For now, it will be business as usual for YB, but they must be preparing for alternative scenarios just in case RBI became stringent.
Note- Invested so my view are definitely biased.
- If divergence of NPAs was such a serious concern for RBI, then most PSU Banks would have been closed by now. What should be looked at is the basic motivation behind such moves. Besides, if the recoveries are not made within the scheduled time period (YB has been very efficient in making recoveries), only then such an action is justified.
- YB is a mature franchise and capable of doing very well under any good leadership. Even if RK is not the CEO, he will continue to be on the board and continue to steer the bank. He could also use a proxy CEO for that matter.
- RBI’s functioning is not as transparent as SEBI (that has taken Chanda Kochhar and others head on). If a person is not fit to run a large organisation he should be asked to leave. However, this kind of limbo reflects very badly on RBI.
Disc: Invested and buying in the current dip
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Precisely. It is surprising that despite being serious offenders in reporting of NPAs and being in center of other more serious charges like ever-greening of loans and conflict of interest, RBI is OK with Shikha Sharma and Chanda Kochhar continuing on the boards with their truck loads of salaries and not Rana Kapoor.
Regards
SJ
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Another key point here is that RK has a huge skin in the game unlike Chanda or Shikha. (Look at the promoter holding and you will know what I mean). So the bank’s future was and will continue to be safer in his/his proxy’s hands than anyone else.
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Do Indian Regulators have consistency of approach or same standards?
Difficult to say.
Related points : 1.Axis has been asked to find replacement for Ms Shika
2.SEBI asked for status report from ICICI Bank for its large loans to couple of Corporate houses. Internal Inquiry is supposed to be ongoing! Yet the Bank’s board supports Ms Cochhar’s continuation in Board of ICICI Securities.
3. Mr Kapoor can continue till further notice!? Why introduce this uncertainty in the minds of investors?
Regards
Disc: Added today YB
While this price fall is uncomfortable it has not changed my intrinsic opinion about Yes Bank. My thoughts on Yes Bank remain the same as written by me few months back.
Fundamentally there is no change in the finances of the bank. In fact things are going to get better for all corporate facing banks from here on.
Historically when price falls because of any non-business/finance related issue then it has always been a good time to buy.
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Just want to add an advise from Rakesh Jhunjhunwala which I saw in a YouTube video… don’t try to catch the falling knife but just wait for for it to hit the bottom and rise few percentage…this is to ensure that it has hit the bottom…
Waiting for the same…
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I think we are discounting the importance of a promoter-cum-CEO driven bank. Look at the historical performance of promoter led banks like HDFC, Kotak, IndusInd and Yes. Compare that with ICICI and Axis and you’ll know what I’m talking about.
That said what is all that noise about “ease of doing business” when a company is not even allowed to choose it’s leader? It reflects very badly on the RBI to keep such a critical decision pending! What is it doing meddling with this decision in the first place? It should instead warn the bank over divergences, issue penalty and convey future action if such divergences are related again! That’s it.
Finally I don’t think RK is going anywhere. Frankly he has built the franchise and there’s no way he’s letting it go this easy! Agree the current dip is a good time to double dip!
Disc.: Holding
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i think the folks posting earlier have made some great points and i wholeheartedly agree.This episode shows the RBI in extremely poor light. They took no action against senior management of PSU banks which were happily letting scamsters loot billions in public funds (and who are now sitting pretty in foreign locations). After having been asleep at the wheel for so long, they have now acquired a sense of misplaced zealousness by trying to make an example out of well run private sector banks. While Shikha Sharma’s case was understandable since she deserved the boot for incompetence alone, singling out an institution such as Yes Bank which has demonstrated that their classification of assets was largely correct in terms of the way in which they were resolved subsequently, shows a disregard for the consequences of their actions. I would be interested in seeing what action (if any) are they willing to take against Kotak should he fail to dilute promoter shareholding to less than 20% despite having had a special dispensation of an extra 5 years in meeting the regulatory norms, and who recently tired to pull wool over RBIs eyes by trying to pass off preference shares as capital. Very poor by RBI.
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Came across the following report in today’s Business Standard:
It says corporates are going for commercial paper, bonds and foreign sources (FDI etc) to raise money and reducing reliance on banks to do so.
The article talks about the mess at PSBs, (banks are wary of lending until the NPA mess and recapitalisation are sorted), 75% average capacity utilisation and retail focused lending by Pvt banks as the reasons for this trend.
Thinking about the implications of this for Yes Bank, being a corporate focused bank. 
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I do not think that is a problem for YB. YB corporate loan book has grown rapidly (I guess around 50%) in the last two quarters. The PSU bank crisis is presenting a rare opportunity for YB to get into corporate accounts, which it was finding it difficult to break in earlier.
In the short term, this has impacted the NIM, but corporate clients also offer the long-term opportunity for fee-based income. So, hopefully, NIM will inch upwards in the next few quarters.
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