Yes bank


(Varun) #552

It is good to know that I was able to help.

I hope you took into consideration that calculations were based on 8% NPA without recovery before making your own decision.

I also think it is better to wait and watch. I have some shares currently looking at a huge loss. Not adding as of now. Will wait for the outcome of the board meeting on 25th.


(bimalb) #553

https://www.bloomberg.com/news/articles/2018-09-21/billionaire-bank-founder-falls-foul-of-india-bad-debt-battle?utm_medium=social&utm_source=twitter&utm_content=markets&utm_campaign=socialflow-organic&cmpid%3D=socialflow-twitter-markets


(Om Shivaya) #554

IMHO, Yes Bank’s biggest strength is its recovery mechanism, which I am not too sure the RBI takes into consideration too much. Let’s see how this pans out. I’ll give Yes Bank a year as usual.

Good luck to all invested. Cheers :grinning:


(Susindar) #555

Talking about mispriced opportunity, Bandhan Bank whose yearly profit equal to the quarterly profit for Yes Bank is quoting at Rs72,000cr as compared to rs58kcr for Yes Bank. On top of this, bandhan Bank is Microfinance which is fully unsecured. I am not saying yes Bank won’t go down further or it is not a risk. I am seeing a huge mispricing here. Whether Bandhan is over valued or yes bank undervalued is another story.


(jainnitinp) #556

(bimalb) #557

(vaibhav) #558

Rajat Monga seen as one of the front runners


(dprashant) #559

finally we have some info on the reasons given by RBI in their letter to YES Bank,

weak governance ,
weak compliance and
wrong asset classifications
are the three reasons given by RBI to yes bank as per ET now sources.

these are very basic and core requirement for any Banking institutions.
while we don’t know the magnitude of the issues related to these three points given by RBI to Yes bank, but it seems it might be some serious ones.
I think price may further adjusts considering these 3 points.
specially w.r.t Asset classifications may impact the % NPA from current ~1% to higher level , to what level is any body’s guess at this stage.

Disc. Invested and added few today.


(jainnitinp) #560

Source of the info? With all due respect, unless this info comes from the bank itself or from RBI, it could be news channel masala/speculation


(bimalb) #561


(dprashant) #562

Very much possible , but when RBI is taking such step in that case there must be something serious issue thats given and I can’t think of any other reasons for taking such measures.
So ,
What do you think can be issue for which RBI took such step and reasons for it being traded to heavy discounts to other private bank from past sometime ? If we connect all the dots that it seems very likely …isn’t it ?


(Devaki Nandan Tripathy) #563

Worth contemplating.


(RICHAJ) #564

I have to strongly disagree with this. I have read several accounts of the functioning of the RBI, and even spoken to one of the recent ex-Governonrs one-on-one, and I do not believe this at all.

It is very likely, IMO, that the RBI is trying to save face from the PSB and related fiascos by strong arming the private banks. After all, how else to explain such harsh treatment for Rana Kapoor compared to Shikka Sharma and Chandana Kochher? The latter 2 have either destroyed wealth, or are accused of breaking laws.

It is sickening that the RBI has no concern for the stock price of an institution as important as a bank, since this drop can legitimately affect its basic functioning, hence why short selling of bank stocks is not allowed in some places. There are innumerable ways in which the RBI could have handled this better and they decided the worst possible way.


(test) #565

They have already stated the reasons - governance lapses (various fines imposed) , weak compliance culture and incorrect asset classification (divergences) … They have gone through the assets with a fine tooth comb and highlighted the divergences already… So pointless for us to speculate that there is something more than what the rbi has been able to discover and has stated


(Devaki Nandan Tripathy) #566

Even if it were true, mismanagement is apparent in a much larger scale in PSU Banks in comparison to private banks. But RBI does not have the will or power to sack a low ranked PSU bank clerk, leave alone a CEO… :grinning:


(test) #567

I agree with you that it is over kill… A more equitable way would have been to approve the appointment for a period of one year with further extension subject to review based on adherence to the three parameter parameters cited… That would have been fair and sent a strong message as well IMHO


(Devaki Nandan Tripathy) #568

No one is questioning the authority of RBI regarding the management of banks. The basic question is its transparency in decision making and accountability of its decisions.

But, we are in a country where even after 70 years of British Raj, the raj mentality of Indian authorities are prominently visible in all aspects of life, not just RBI. Where even a railway booking clerk behaves like a prince, what can be expected of higher ups? :grinning:


(jainnitinp) #569

Speaking of questionable practices with the RBI, I don’t know how it is ok with Chanda Kochhar being elected to the board of ICICI Securities.
Anyway, however questionable, RBI has already acted. It is now for investors to take a call whether to remain invested and wait for a recovery (a large institution like Yes Bank certainly has the capacity and the bandwidth to come out of this situation), or cut their losses and take the money elsewhere.


(RICHAJ) #570

I agree, all of this should be considered as a regulatory risk that adds to the risk premium of Yes Bank.

A much more pertinent debate is how well Yes Bank can run without Rana Kapoor at the helm. I can’t think of any way for an outside investor to evaluate the corporate structure or operational procedures at the top management level. At first thought, I find it hard to believe that an organisation like Yes Bank can grow so large or so rapidly without rock solid SOPs and competent people at every level.


(jainnitinp) #571

Yes, no shortage of talent. The two gentlemen considered to be the prominent candidates to be the successor - Rajat Monga and Pralay Mondal - are both IIT+IIM material.
Remains to be seen, however, whether the board goes with internal or external candidates.