I think people should stop reading too much into common employees buying and selling few stocks. First person might be having some extra cash and other guy might be sitting on hefty profit on his ESOPs and now sold it. People pledge their holding to raise cash as well. Doesn’t mean a thing. In all probability, they are people like us and has been with the bank for majority of it’s existence. Yes Bank is well known in banking circles to reward its people with big bonuses (bigger than market trends) and promotions.
Bigger picture is that bank is undergoing leadership transition (somewhat forced by RBI) and this is leading to a major reaction by the market. Of course, there are some things wrong with the Bank, but my bet is that they can deal with them adequately. Being the best paymaster in the industry, bank is filled with talented people all across verticals and horizontals such as business people, Credit, compliance, treasury, trade, project finance and branch services. As an ex- yes bank employee, I can vouch for it. Whole world knows that yes bank cost of fund is higher than the rest, but still it is next to impossible to take over their business due to quality of service.
So as an ex- employee, I can assure you that Yes Bank is now too big an organization to be dependent on one person. Next 4-6 quarters may be a bit tumultuous, but bank is more than capable of life with Rana Kapoor at top.
Thanks for your insights as an ex-employee. Really helps!
As for employee trades, like I said in the beginning of my post “don’t know if it counts for much” and for me it doesn’t really because of the reasons you mentioned as well. But thought of sharing anyway.
I said too big to be dependent on one person, not too big to fail. Both are different things. I have just shared my views. You can leave it or take it.
Also, Yes Bank is a start-up. Tell me one start up where ownership and decision making is not concentrated into one individual or co-founders. Same is the case for Yes Bank during first 5-10 years.
This is not an argument, my reading of the recent development could be off target. As per the news article, on 20.4.17 RK had informed that they expect the recovery very soon from the loan exposure to a cement company.
When & if the same account is hived off to an ARC now, questions on earlier assessment of 2017 do crop up.
If you read the press release carefully, it seems it is not the bank’s entire exposure to BJCL that has been sold off to the ARC - “resulting into changes in holding of the Bank by more than 2% of the total shareholding of BJCL.”
Yes Bank put under watch list by CARE not because of something suddenly having gone wrong with the fundamentals. But primarily due to the uncertainty arising out of RBI’s decision to end the MD’s term on Jan 31, 2019. The ratings assigned to various debt instruments of Yes Bank Limited (YBL) have been put on ‘credit watch with developing implications’ on account of the recent communication from the Reserve Bank of India (RBI) restricting the tenure of the current Managing Director and Chief Executive Officer (MD & CEO) Mr. Rana Kapoor, till January 31, 2019, as against the three year extension approved in June, 2018 by the shareholders.
Asset Quality - a.Furthermore, the bank reported that, as on March 2018, of the Rs.6,355 crore of NPAs reported as divergence, Rs.485 crore remain classified as NPAs by March 2018. The bank received payments of Rs.2,434 crore and sold Rs.803 crore of NPAs to Asset Reconstruction Companies (ARCs). The remaining Rs.2,633 crore of loans were upgraded to Standard assets. As on June 30, 2018, the bank reported Gross NPA ratio of 1.31% and Net NPA ratio of 0.59%. b.The bank has relatively low exposure to NCLT cases vis-à-vis other public and private sector peers with total exposure of 0.32% of Gross advances to NCLT List 1 and 2 accounts combined as on June 30, 2018.
Loan book - In FY18, YBL’s retail advances nearly doubled to Rs.24,831 crore (Rs.12,471 crore as on March 31, 2017). However, the share of retail advances to total advances did not increase proportionately as the corporate loan book also registered a strong growth of 54%.
Looks like he was mis-quoted: Here is what he tweeted:
“I just heard my own interview for I was confused. I did not use the word massive. I said no fraud likely- different from saying massive fraud unlikely.”
