Yes bank

If you do a historical analysis, you will realize the stock had dropped about 25% in Aug 2015 when there was uncertainty over Rana Kapoor’s term extension. However, following RBI’s confirmation over his term it recovered almost all the drop in price.

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This is an extract from Q3 FY18 conference call.
@atul1082 and @sumit680 , I was mistaken when I said that Yes Bank has negligible exposure to conventional thermal assets. So I take that back and apologise for the inaccurate statement. It seems that their exposure is 3.4% as on 31 Dec 17. I further checked the Yes Bank presentation for March 18 and June 18 and found that this exposure had reduced to 2.6% and again to 2.5% respectively. I guess things seem stable as of now. They have re-iterated that all these projects are operational and are in the BBB and above category.

Sachit

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Got an email from the bank. Is it comforting?

Dear Valued Shareholder,

It gives me immense pride and pleasure to share that YES BANK, India’s fourth largest Private Sector Bank, has been recognized as the 22 nd Most Valuable Indian Brand in WPP Kantar Millward Brown’s BrandZ Top 75 Most Valuable Indian Brands 2018 report.

I personally thank you for your trust and continued patronage with the Bank. Since inception, YES BANK has established itself as a truly differentiated Financial Brand, built on the strong pillars of Growth and Innovation. And today, it is heartening to see the progress of a homegrown Indian brand, with a Brand value of USD 2,622 Million, within 14 years of institutional excellence.

YES BANK brand has been gaining numerous accolades and recognitions. YES BANK also featured as the 34 th Best Indian Brand by the Interbrand Best Indian Brands 2017. YES BANK was honored as the Best Private Sector Bank by The Consumer Superbrands India, 2017. The list of Brand recognitions further include the recent Economic Times Best BFSI Brands 2018 and Economic Times Promising Brands 2018 awards.

Once again, I thank you for the faith entrusted in us.

INDIA bole YES!

Sincerely,
RANA KAPOOR

I must say I’m not comfortable with these kind of gimmicky tactics used by a big institution like Yes Bank.

While the amount in itself is not very significant till now (33 crore), it’s the reputational risk that these kind of events trigger.
Axis was chided publicly when it’s branches were found to be converting cash illicitly post demonetization. After that the bank as an investment opportunity lost its value to me even though the stock has paid off quite handsomely in last few months.
Imo, a big institution like Axis or Yes doesn’t need these small time tricks to grow & be even more systemic that they already are.
Compliance with the law is crucial for any company, even more so for an institution handling tons of money. And non compliance can cost a lot!
Why then would Yes employ such tactics which have minimal reward (how much could it save on tax with this really?) and carry too much risk especially in these times when RBI is at the throat of all banks?

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The amount seems minuscule for a big institution like YB to take such a risk of reputation. Besides, if the GST council is correct in its interpretation, why are they stopping short of legal action?

Hi

I think this thing which is floating around ‘cut and pay’ model and the tax evasion is a little surprising to me.

Domestic Remittance business on this model of commissions to BC has been around for many years. I really don’t think a bank like YBL or RBL will try to save pennies by flouting some norms.

I will go ahead and say that media is making a mountain of a molehill perhaps. In the event that there is even an evasion I am sure this is not intentional.

I can vouch that YBL when it started off remittance business had all compliance and legal approvals in place. It is not just the banks but even telcos like Airtel Money now payments bank, Vodafone mpaisa who followed the exactly same model.

I had actually never heard the term ‘cut and pay’ before this RBL news even after being literally the one of the first teams in a bank to this business in India! Just saying :slight_smile:

Regards
Deepak

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Anyone having any info on kind of exposure that YES bank has on IL&FS ?

Credit : Toshniwal equity Twitter

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Does it mean 0.8% of their FY18 book size ?

I got the above from this Economic times article dated 12 September 2018:

Is it just out of vengeance, after the recent episode, that UBS has put a sell target of 170 on Yes Bank, despite having a buy on every other bank stock out there?

Or is it something real that UBS knows that others don’t?

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For yes bank if some1 wish to buy, one would wait for the RBI audit and its report on any NPA divergence, it will clear the air of their alleged NPA book classification issues.
If any divergence comes out( should) then the stock will discount the much speculated NPA book cooking by yes bank and give a better buy.
I would not buy it otherwise.

One would do own study.

Maybe they have insider info of RBI’s audit.

UBS has a history of negative reports on Yes Bank. Same thing happened in 2015

2015: https://www.business-standard.com/article/markets/yes-bank-takes-on-ubs-over-negative-report-115071401544_1.html

2016: http://rakesh-jhunjhunwala.in/forum/threads/sell-yes-bank-target-rs-650-50-downside-ubs.2632/

2017: https://twitter.com/darshanvmehta1/status/923705524771635200

I would take their report with a pinch of salt. Interesting thing is that they keep raising their sell target price as Yes Bank price goes higher.

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Then their report has to taken with a pinch of salt, thank you for the information.

If everything was fine with Yes bank (after all these problems are resolved), it wouldn’t trade at this price then no? It would no longer be a buying opportunity. Only good companies in bad situations make for a good buy in my opinion. And Yes Bank seems to be in such a situation today:

  1. Uncertainty over CEO/MD
  2. Uncertainty over NPAs

Just my opinion and views are biased.

I don’t agree that it’s at cheap valuations.
The investors are very hopeful that NPA issues are just market stories not a reality.
If RBI comes with the divergence report ( if any) it wouldnot solve problems but confirm it has a problem and bank would need to do provisioning for the additional exposed NPAs this would affect the subsequent profits and dent confidence of many present investors.
Now decide when will be good time to buy.

Regards,
Mike

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The trend seems to be strengthening with every passing qtr…

The unthinkable (at least in my opinion) has happened:

Thankfully RBI has given some time for succession planning. But does Yes Bank have a plan?

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It’s unlike Yes Bank to not be ready with a possible successor though they may dilly dally a bit and may not have publicly declare one so far. I think they may have a plan in case RK extension was not given.

Just my gut feel…no data to back it up.

:grinning: