Yes bank

Kotak has also disclosed nil divergence in the press conference … https://www.financialexpress.com/market/we-have-no-divergence-in-provisioning-says-joint-md-of-kotak-mahindra-bank/1022560/ … Will RBI take action against them ? Why have’nt they taken any action yet against Kotak bank for non dilution of promoter shareholding ? … They appear to be hounding yes bank !

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That teacher who always hates one kid, no matter whatever he does. In RBI-YesBank saga, RBI is losing its credibility.

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Keep aside Yes Bank, RBI and the recent controversies for a moment.

Charlie Munger had the following to say about financial companies: “Where you have complexity, by nature you can have frauds and mistakes… this will always be true of financial companies, including ones run by governments. If you want accurate numbers from financial companies, you are in the wrong world” . The fact is, financial statements of banks are inherently non-transparent and difficult to analyze. This is because of the very nature of business and the way accounting is done – decisions taken today whose fate will be known several years later, use of estimates to value assets, accounting of income on accrual basis, lack of relevance of cash flow statements, heavy leverage and so on. All of this is true even in the cleanest of markets. Add to this the Indian context – inherently poor governance standards, absence of fear of law enforcement, lax regulators, corruption and so on, and you never know what you are staring at.

Over the years in their quest to find the “next HDFC Bank” (or Bajaj Finance, for example), investors have latched on to one finance company after another. But even these companies are pristine only until – until they are not. I doubt if there is any long term investor who not only correctly identified these multi-baggers in advance, but correctly stayed away from all other false starts (the “next” HDFC Banks). Their outcome says nothing about the process used to identify the stock.

It is not without reason that though there are thousands of books on how to pick the right stocks, there is virtually no literature on researching and picking the right finance companies. At best, investing in finance companies is a sectoral call. At worst, it is just a shot in the dark.

(Disclosure: No exposure in any finance company, no opinion on any specific company mentioned above)

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Do you really think a full range of financial services this ART group has launched can be run by her daughter alone? I am hugely impressed by the superhuman capabilities if she could. There is something called “benami” in this country and I would suggest you to get used to it.

NPA divergence was a small issue for the market as almost every bank was kind of guilty to an extent. This minor issue was anyway supposed to be healed with time as the regulator was on top of it. The stock fell like a rock in water when RK was denied continued fiefdom and the market got a regulatory confirmation of what they hear off the record. Folks started assigning reasons like NPA divergence for his ouster but has the bank disclosed any communication in this regard? It is all speculation as far as I know to put the blame on NPA divergence alone. Ex-Gov of RBI was certainly disturbed by something much more concerning since it was reported that RBI had backing of Finance ministry as well on this decision.

I have no sympathy with other promoter group but with so many regulatory issues cropping up, it is their right to seek representation. Anyone would like to protect their wealth in a legal way and mind you she is capable of joining the board. It is funny that RK thinks her daughter could run bouquet of diversified financial ops independently but her seemingly more qualified niece can’t be on the board due to some manufactured reasons.

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This is all more reason that RBI should share its audit report with the bank’s customers and share holders.

Can any one share arguments in favour of RBI not wanting to share its audit reports in public domain.

Everyone here is asking the question “why isnt RBI pulling up other banks who reported the same?” this is like going to the principal’s office and saying but my classmate also copied why arent you catching him/her? This is juvenile and irrelevant in investing. You need to make a return not get answers from the RBI as to why they didnt pull up other banks. The RBI can turn around and say because they never revealed the report details without our permission.

Stop questioning the RBI, nothing will change and you wont get an answer. Start questioning Yes Bank mgmt., your investment thesis in Yes Bank and your margin of safety for taking on such risk along with your upside expectations for taking on such risk. That is a more relevant discussion.

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Ofcourse, that is the main question in every investor’s mind - Credentials/reputation/actions of new RBI approved CEO Mr. Gill who is to join in abt 10 working days, how they raise equity capital… Divergence/asset quality was admittedly a big concern in my mind (I guess in many investors’ minds) which has subsided to an extent ( but one has got to constantly watch it).
As it is, YB is a fantastic, very well entranched liability franchise.

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RBI rap: Yes Bank denies any wrong-doing in making report public

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This is on expected lines!

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BV is expected to grow by ROE*(1-dividend payout %)

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That is the best case scenario for a very large mature organization. Often, a lot depends on company’s capital allocation strategy. Often I see that there is quite a discrepancy on ROE vs growth in shareholder’s equity. Cashflow statements would help to see where exactly the money is being used.

@R.Vivek: It is tough to compare ROE and PBV as PBV also contains stock price that depends on Mr.Market’s sentiment.

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Just sharing the information

Following are the numbers as a % of total advances:

Good to see that secured asset increased from 44% to 73% as % of advances… and unsecured asset decreased from 54.78% to 27% as % of advances.

This brings me some level confidence to me about asset quality improvement… (Still don’t know how much this numbers are manipulated)

Can anyone share the same numbers for other banks like HDFC Bank, Kotak Bank. Axis, IndusInd, ICICI?

Source:Annual reports.

@pratikchandak
Yes you do not know if the numbers are real.
Taking on this risk and putting in this sort of time I think you have to ask yourself what is your return expcation and odds of hitting that expectation.
Evaluate your idea against nifty long term cagr incl dividends reinvested and then make a decision. Iam yet to see a post from Yes Bank Contra investors regarding their downside risk and upside potential. It seems like most here are playing the 52 week low high game. Taking a bet that there are no issues and the stock will make a J curve and then compound away for years to come like an HDFC Bank.

I would like to know the real idea behind buying yes bank in this market and are the risk returns justified? And also the time spent to hack away at the million corp announcements and constant checking of numbers etc: etc:

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Real idea behind buying yes bank is a Nil Divergence report by RBI, which has created a base both technically and fundamentally.

Fundamentally people are sure now that no hidden surprises in the book.
Technically, on after Nil divergence report stock bounced back on heavy volumes almost 1% stock changed hands within minutes of market opening.

Now with -ve surprises out, Yes bank is a case of undervaluation among private sector peers.

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Have been noticing a spike in Digital Payments Gateways(Specially UPI) where Yes Bank is present heavily.
Recently applied for a credit card ( The verification process was lengthy , however it gave me assurance on how the bank treats unsecured credit). NIl divergence report is a large boost and the bank is making measures to have their presence felt by various campaigns and initiatives. All in all, throughout the period of share price falling from 400 to 150, the management was consistent in their commentary unlike a DHFL, therefore added more at 180 levels.

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Looks like its good news for the contra investors who bought yes bank. Good things to come apart from an imminent dilution of equity to raise capital it seems.

Hemndra Hajari - nice to see his views and he seems to be positive of recent actions . Watch last question and answer of video - seems be Yesbank good at answer criticisim with professionally … good to know

Views my baised :
Still holding my positions and constitute 50% my portfolio value - bought as value contra with high conviction from 230 to 160 levels as average of 180 -

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