ICICI: P/B - 1.6
Yes Bank: P/B - 2.9 (even after declining from 405 to 325)
Please check your facts before making emphatic statements.
sure, these ratios need to be looked in relation to the growth they have shown.
3 yr PAT CAGR for Yes - +28%
3 Yr PAT CAGR for ICICI - -15%
@devaki.tripathy that was from 2009 lows of 55 to 380 levels. No desire to relook at this again. My initial attraction was that they wanted to be Rabo Bank of India but looks like they turned out to be preferred banker for shady promoters.
Valuation is always after factoring in everything - growth, NPAs, leadership, pat etc.
I donât know about other âshadyâ promoters youâve mentioned but Fortis is a reputed institution built by Shivinder Singh through hard work and dedication (if his own testimony is to be believed). It was after 2015, when Shivinder went into exile, that the elder brother Malvinder Singh and his business associate Sunil Godhwani messed things up.
The events might or might not have unfolded completely as Shivinder says but Fortis wasnât a bad asset some years back.
Link for Shivinderâs letter: https://wap.business-standard.com/article/companies/shivinder-mohan-singh-drags-elder-brother-malvinder-singh-to-nclt-118090401048_1.html
No promoter of a bank, having personal net worth in it, is likely to cheat his own self! Laws of incentives are stacked against RK to behave with mala fide intentions.
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I have no way to figure out which one of two brothers is honest. This Singh family has cheated almost everyone e.g. Pharma regulators worldwide, Japanese acquirer of Ranbaxy and then shareholders of Fortis by siphoning funds blatantly. What they have built is of no interest to me as an investor. I will recall how do they treat minorities and they have lost it in almost all of their ventures ⌠Ranbaxy, Religare and Fortis. Yes Bank knowing their past very well extends some sweat deals to the promoters. RK is smart and might prove to the world that they can recover the funds but is this the way a retail bank should function? What stops him from building a quality retail franchise? What happens when the jockey is actually asked to go and the day is coming close.
I have yet to figure out YBâs core competence/competitive advantage/dominance in a sector.
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Hope RanaKapoor vl nt bcome NRN n d incoming CEO(if outsider as per d rumors) wil nt bcome scapegoat like Vishalsikka bcoz of d founder bias of RK.
Vouching 4 independent rational figure.
Some minor twist yet to play outâŚ
Like do you want RBI to say it in public and spend panic in investor forum that they are not convinced with the kind of growth Yes Bank has shown over years?
Exactly. Why not? RBI is accountable to Indian Parliament and people of India. If it finds anything shoddy, it is its moral duty to bring it to public knowledge whatever may be the repercussions. Moreover, if it finds anything illegal, itâs its duty to refer it to investigative agencies.
RBI, especially after departure of Rajan, behaving less like an independent regulatory authority and more like Mumbai consulate of North Block. Remember demonetization. RBI used to give daily deposit figures. Somewhere after a month, that practice was discontinued and they spent a year and half just saying counting is going on. What was RBI counting for one and half year what a bank branch can count in a week? After the event faded from public menory, RBI/Govt just released a nondescript press release saying 99.4% of SBNs deposited.
So much so for the torch bearers of transparency.
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I think rather then people speculating and imagining the reasons itâs better to give reasons at least at high level.
Imaginations are limitless specially on negative track so it can do far more harm to investors as market prefers certainty ( good or bad ) instead of uncertaint situation.
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Stock market history has it that big money has been made by buying quality businesses when they go through bad times. Case in point Nestle India (Maggi crisis). Based on a holistic review, my belief is that the current crisis in Yes Bank (imposed exyernally by RBI), fits that description very closely.
I might turn out to be wrong but then in Rakesh Jhunjhunwalaâs words, we invest in the future and the future is always uncertain.
i agree however, in case of Banks where we dont know whats the actual reason and with 10 times leverage if the books are cooked and NPAs are underreported and if it comes to 10%. in that case technically it can be called bankrupt. ( since it does not have Govt of India as promotor like PSU banks ) . as on date while we can say that there surely will be some issues around under reporting , corporate governance etc. however we donât know the extent/magnitude of it. so cant be too sure about revival.
if the magnitude of the issues arenât too much in that case it will revive sooner.
disc- Invested, waiting for some clarity to emerge related to the magnitude of the issues i.e. NPA under reporting etc.
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Books being cooked is a very serious allegation. If there was any truth to it, Rana Kapoor would have gone long ago. Could have possibly been behind bars as well. So, I disagree with it.
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Besides, itâs better not to have the Govt of India as the promoter. We all know the situation that PSU banks are in. Would anybody on the forum dare to make a long term investment in them?
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RBI has managed this issue very poorly and opaquely to say the least.
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Iâm on multiple forums on Valupickr and have seen investor behavior going irrational to the extreme with other sound companies too when they fell on bad times, and imagining all sorts of doomsday situations.
Personally, though the stock will react negatively tomorrow and possibly early next week as well, I will wait for Tuesdayâs board meeting to see whatâs the bankâs course of action before making any conclusion.
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Yes Bank will not remain Yes bank without leadership of RK, new comer whoever he is , even better than RK , it will be something newâŚ.
Question is in absence of RK will yes be able to give this kind of growth âŚ. And why anyone will buy in absence of this answers, but those sitting on profit will be selling heavily.
and divergence on march 18 books, if any is another uncertaintyâŚ.
Board meeting on 25th will be crucial
Can see support at 288 and then at 230âŚâŚ
IDFC has come out sell with target of 230
Holding since last 10 years and forms 22% of PF
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You need not float your cell number here.
Zebra stripes never change ⌠check this link ⌠they have not categorised Reliance Naval as NPA.
Transition is going to be very complicated.
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Rajat Monga is trusted lieutenant of RK and with him since inception of Yes
He may be made MD CEO and RK runs from behind becoming non-executive director seems the best case scenario to stop free fall
I wouldnât worry about it, according to Annual report of Reliance Naval, its Consolidated default amount to Yes Bank is 778 lakhs - this is the total amount as Reliance Naval clearly states in the notes to accounts that bankers have asked for all their loans back. Also, chances are that since the amount is low, it was probably against some Bank Guarantee (My assumption) which are usually covered by FDs.
Diverging explanation welcome.
@sachit Are you sure the exposure to Reliance Naval is not higher than that? I had read some where that the exposure is around 500 odd crores.