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<ul><li>All of SBI’s windfall from SBI Life stake sale went into provisioning for bad loans.</li><li>ICICI Bank stock could be re-rated based on its exposure to latest list of troubled firms.</li><li>HDFC Bank’s retail loan quality has not deteriorated but slow pick up in auto loans might affect it in the future.</li><li>Kotak Mahindra Bank is already affected by slow uptake in loans and its credit costs are also growing.</li></ul>There has been a lot of fear around the health of Indian banks, including the large ones, for a while now⁠— largely due to rising bad loans. However, if you look at some of the top banks in the country⁠— like the State Bank of India (SBI), ICICI Bank, HDFC Bank, Kotak Mahindra Bank, and Yes Bank⁠— one would find that the factors that affect the earnings are largely different. Yes Bank’s gross non-performing assets or basically loans where recovery is tough stands at ₹17,134 crore which is more than four times what it was in the same quarter last year-- ₹3,866 crore. And it might have <a href="https://www.business-standard.com/article/finance/yes-bank-stock-falls-by-15-as-investors-worry-over-hdil-dhfl-exposure-119093001180_1.html">more to come </a>because of its extensive exposure to troubled shadow banks like Housing Development Infrastructure (HDIL) and Deewan Housing Finance (DHFL). Not just that, it also has exposure to Anil Dhirubhai Ambani Group and Essel Group as well. In this regard, SBI has more to worry about the crisis in the country’s shadow banks, whereas Kotak and HDFC Bank are largely untouched by the same crisis because they lend more to individuals than corporates, while ICICI Bank too has managed to curb its exposure to troubled sectors like telecom and real estate financiers. The same cannot be said for Yes Bank, whose bad loans have been consistently rising over the last one year. 
 
 
 
 
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 The SBI story The fortunes of India’s largest bank State Bank India depends on the survival of the shadow banks that it has lent to. After the IL&amp;FS debacle last year, a lot more are in the line and it has an exposure to Dewan Housing Finance which has not yet sunk but on thin ice. Yet this quarter has been better than expected for SBI as its profits went up three times over from the same quarter last year. But that is not the best news it has received this quarter. Its slippages which is basically the extent of loans that have turned bad---have come down by half. Going ahead, its health will depend on how it holds onto this number and DHFL’s survival is extremely important. But the bank is confident that its slippages will not go down below 2%. For a bank with a vast loan book, it is as high as ₹8,000 crore. Basically, it’s a good enough quarter for SBI if its loans worth this ₹8,000 crore turn bad, and not more! ICICI Bank has corrected its course over time The country’s largest private bank ICICI Bank too has an asset quality problem and its extent of slippage is lower too. Its slippages came at ₹2,480 crore for the quarter -- at around 1.7% of its total loans. The improving asset quality has helped the stock price which has gained 17.2% in the last six months. “Importantly, it displays no large stress exposure to some downgraded groups or emerging stress groups, while also has lower exposure to telecom, housing finance companies, non-banking financial companies and builders,” said a report by Prabhudas Liladher. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[
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 As much as ₹1,260 crore worth loans recovered to get off the ‘dud’ category and that is much better news. When banks have fewer bad loans on their books, they have to keep less amount aside -- as per regulations. It means they will have more amount at their disposal to lend, which also doubles as growth money in case of banks. This will help the bank compete with other private banks on a war path of growth like Kotak Mahindra and HDFC Bank which are exhibiting double digit growth. Individual borrowers in India are better in repaying loans than companies⁠— and that helps HDFC Bank and Kotak Mahindra. While HDFC’s loan growth is at 15% from last year, in spite of the fact that this bank which lends to individuals instead of corporates is seeing lack of interest for two good segments -- auto and housing. The loan book of Kotak Mahindra which has a mix of retail and corporate clients grew by 20%. But these banks will see the effect of slowdown that is lulling the economy. “Slower-than-expected loan growth will likely delay the leveraging up process and higher than expected slippages and credit costs given weaker macros. Weakness in capital markets would impact the flow businesses,” said Nomura in a report on Kotak Mahindra Bank. While other banks are offering lower rates for deposits, an aggressive Kotak Bank is offering rates as high as 8% to ensure it has enough money to lend to its borrowers. But that has also meant that it has a narrower profit margin.

What bothers Yes Bank does not bother its bigger peers as much

<ul><li>The central bank signed off on <keyword id="45660" type="COMPANY" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword>’s financial statements for the year ended March 2018 in its latest <keyword id="7324747" type="UNKNOWN" weightage="20" keywordseo="Risk-Review">risk review</keyword>.</li><li>The clean chit from the RBI will reassure investors as the bank attempts a phase of recovery under new CEO Ravneet Gill.</li><li>Yes Bank's shares surged nearly 30% in the first session of trading today. </li></ul>Late last evening, Yes Bank, one of India’s largest private sector lenders, <a href="https://www.yesbank.in/media/press-releases/divergence-in-asset-classification-and-provisioning-for-position-as-on-march31-2018">declared </a>that the <keyword id="6354335" type="ORGANIZATION" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> had cleared it of under-reporting <keyword id="142154" type="PERSON" weightage="20" keywordseo="bad-loans">bad loans</keyword>. The central bank signed off on Yes Bank’s financial statements for the year ended March 2018 in its latest risk review, indicating the lender’s compliance with reporting and asset provisioning norms. As a result, Yes Bank's share price soared by nearly 30% in the first session of trading today amid a renewed sense of confidence in the lender. The news is welcome for Yes Bank. The lender had a rather tumultuous 2018, losing more than <a href="https://www.businessinsider.in/one-of-indias-largest-private-banks-has-lost-more-than-half-its-market-value-in-37-days/articleshow/65991141.cms">half its market share</a> in less than 1.5 months between August and September as a result of two things - the RBI’s discovery that it had under-reported tens of billions of non-performing loans and its subsequent refusal to grant CEO <keyword id="128581" type="PERSON" weightage="20" keywordseo="Rana-Kapoor">Rana Kapoor</keyword> an extension to his term. In 2015-16, the RBI found a net divergence of <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/rbi-clears-yes-bank-of-divergence/articleshow/67982541.cms">₹42 billion</a> in its assessment of Yes Bank’s bad loans, which subsequently ballooned to ₹64 billion the following year. While it might be too late to reinstate Rana Kapoor, the clean chit from the RBI will reassure investors as the bank attempts a phase of recovery <a href="https://www.businessinsider.in/yes-bank-stock-jumps-on-new-ceo-appointment/articleshow/67685861.cms">under new CEO Ravneet Gill</a>. It will pave the way for the bank to raise capital from the market and prevent a downgrade from ratings agencies. For the quarter ended December 2018, Yes Bank posted <a href="https://www.yesbank.in/pdf/q3fy2018_19_press_release_mn_pdf">a 7% decline</a> in net profit to ₹10 billion while net provisions stood at ₹50.8 billion - more than 90% of which were taken for exposure to IL&amp;FS or a “stressed infrastructure conglomerate” . More importantly, the growth in its gross non-performing assets was curtailed, as the bad loan ratio rose to 2.1% from 1.72% in the year-ago quarter. SEE ALSO: <a href="https://www.businessinsider.in/one-of-indias-largest-private-banks-has-lost-more-than-half-its-market-value-in-37-days/articleshow/65991141.cms">One of India’s largest private banks has lost more than half its market value in 37 days</a> <a href="https://www.businessinsider.in/yes-bank-stock-jumps-on-new-ceo-appointment/articleshow/67685861.cms">Yes Bank's 15-month journey from regulatory crackdown to finding a new CEO</a> <a href="https://www.businessinsider.in/yes-banks-problems-get-further-compounded-as-its-chairman-is-forced-to-resign-amid-a-corruption-probe/articleshow/66634836.cms">Yes Bank’s problems get further compounded as its chairman is forced to resign amid a corruption probe</a>

India’s central bank says that Yes Bank is no longer lying about its bad loans

New Delhi, Mar 17 () Over 90 per cent of the gross bad loans in the books of troubled Yes Bank were added during the first nine months of the current fiscal, with sour debt swelling by Rs 36,763.76 crore during April-December 2019. Yes Bank last week posted the highest-ever loss reported by any private sector bank at Rs 18,560 crore for the third quarter of 2019-20, as huge provisioning for bad loans hit profitability. The bank's gross bad loans by the end of the December quarter swelled to a staggering Rs 40,709.20 crore. The bank made provisioning of Rs 29,594 crore for these bad assets. At the beginning of the fiscal on April 1, the bank's opening balance of gross NPAs stood at Rs 7,882.56 crore, as per the bank's 'Disclosures under the Basel III Capital Regulations'. Fresh bad loan additions soared Rs 36,763.76 crore during April-December 2019. Recoveries of sour assets were at a meagre Rs 3,937.12 crore during the period. Yes Bank's CEO-designate Prashant Kumar has said the private sector lender will continue to feel pressure from its bad assets in the next fiscal year as well. Of the gross bad loans on the books of Yes Bank at end of December 2019, the bulk of loans -- Rs 30,447.97 crore -- were categorised as sub-standard, meaning the payments towards principal and interest remained irregular or overdue for more than 90 days and were classified as bad for a period of 12 months from the date of NPA classification. Loans of over Rs 9,300 crore were in the doubtful category, with Rs 7,904.49 crore falling into 'doubtful 1' list, Rs 829.07 crore 'doubtful 2' and Rs 573.75 crore classified as 'doubtful 3'. Doubtful assets are bad loans that remain sub-standard for a period of more than 12 months. The rest Rs 953.92 crore loans were in the 'loss' category. Loss category loans are identified as uncollectible, considered to be of little value as their continuance as a bankable asset is not warranted even if there may be some salvage or recovery value. Standard assets are the performing assets/loans wherein the principal and interest payments are regular. The bank witnessed withdrawals of over Rs 72,000 crore of deposits in the last six months. The Reserve Bank had on March 5 superseded the board of Yes Bank due to its poor financial health and restricted withdrawals at Rs 50,000 per account. KPM KPM ABMABM

Yes Bank added over 90 pc of gross bad loans during nine months ended Dec 2019

<ul><li>Congress chief spokesperson, <keyword id="214856" type="PERSON" weightage="20" keywordseo="Randeep-Singh-Surjewala">Randeep Singh Surjewala</keyword> said, BJP must talk about an increase in bad loans at <keyword id="45660" type="COMPANY" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword> in the last five years. </li><li>The Congress alleged the loans given by Yes Bank rose 100 per cent in just two years.</li></ul>The <keyword id="58687" type="ORGANIZATION" weightage="20" keywordseo="Bharatiya-Janata-Party">Bharatiya Janata Party</keyword> (BJP) government must talk about increase in bad loans at Yes Bank in the last five years after Narendra Modi came to power, and should not try to divert public attention, said Congress chief spokesperson, Randeep Singh Surjewala here on Sunday. Responding to the BJP allegations on Yes Bank promoter Rana Kapoor's links with the Congress, Surjewala said the government must answer around Rs 2,00,000 crore rise in Yes Bank loan book from Rs 55,633 crore in March 2014 to Rs 2,41,499 crore in March 2019, and not obfuscate the real issue of people's money sinking into a <keyword id="6605010" type="UNKNOWN" weightage="20" keywordseo="bad-bank">bad bank</keyword>. The relation between the BJP and Kapoor "is well-known", Surjewala said and added, why did the Prime Minister address a Yes Bank-sponsored conference on March 6, despite "the RBI moratorium." The Congress alleged the loans given by Yes Bank rose 100 per cent in just two years after demonetisation from Rs 98,210 crore in March 2016 to Rs 2,03,534 crore in March 2018. Also, the BJP government of Haryana deposited over Rs 1,000 crore in Yes Bank just a month ago, knowing that it was sinking, he said and wondered if Devendra Fadnavis-led BJP government in Maharashtra also deposited money in the private bank. "How does an M.F. Hussain painting of Rajiv Gandhi sold 10 years ago by <keyword id="12587" type="PERSON" weightage="20" keywordseo="Priyanka-Gandhi">Priyanka Gandhi</keyword> to Yes Bank owner Rana Kapoor &amp; disclosed in her tax returns connect with unprecedented giving of loans of Rs 2,00,000 crore in 5 years of the Modi government," Surjewala said responding to a tweet by BJP leader <keyword id="342587" type="PERSON" weightage="20" keywordseo="Amit-Malviya">Amit Malviya</keyword> on the sale and purchase of Rajiv Gandhi's portrait by Hussain.

Yes Bank Crisis: Congress raises question over Rana Kapoor's links with BJP

<ul><li><keyword id="45660" type="COMPANY" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword> has denied all the report that the new chief executive of Yes Bank, <keyword id="788579" type="PERSON" weightage="20" keywordseo="Ravneet-Gill">Ravneet Gill</keyword>, is reportedly planning to replace the entire <keyword id="401455" type="ORGANIZATION" weightage="20" keywordseo="top-management">top management</keyword> of the lender.</li><li>The executives that are expected to go include group president Rajat Monga, CFO Raj Ahuja and chief risk officer Ashish Agarwal. The replacement process is slated to take around three months. </li><li>Having taken over the CEO role in January, Gill inherited a bank that had been beset with corporate governance and risk management issues during the tenure of the previous CEO <keyword id="128581" type="PERSON" weightage="20" keywordseo="Rana-Kapoor">Rana Kapoor</keyword>. </li></ul>Yes Bank is denying reports that its new CEO Ravneet Gill is getting rid of its top brass. A Mint report earlier this morning stated that Gill was in the process of replacing the entire top management of the bank. Gill was reportedly in the process of replacing the entire top management of Yes Bank, which is one of India’s largest private sector lender. In fact, the bank is said to be looking for replacements for around 14 senior executives. The executives that are expected to go include group president Rajat Monga, CFO Raj Ahuja and chief risk officer Ashish Agarwal. The replacement process is slated to take around three months. The culling is likely an attempt on Gill’s to attempt a fresh start for the bank. Having taken over the CEO role in January, he inherited a lender that had been beset with <a href="https://www.businessinsider.in/yes-bank-stock-jumps-on-new-ceo-appointment/articleshow/67685861.cms">corporate governance and risk management issues</a> during the tenure of the previous CEO Rana Kapoor. Starting in October 2017, when the Reserve Bank of India levied a <a href="https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=42050">₹60 million fine</a> on the lender. This followed a sector-wide risk review which showed that the private lender had under-reported a series of non-performing loans in its financial statements for the year ended March 2016. Yes Bank’s market value took <a href="https://www.businessinsider.in/one-of-indias-largest-private-banks-has-lost-more-than-half-its-market-value-in-37-days/articleshow/65991141.cms">a dramatic hit </a>in September last year, when the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> refused to extend Rana Kapoor’s tenure as CEO of Yes Bank, giving him four months (until January 31st, 2019) to vacate the position. The lender’s woes were further compounded by a rise in <a href="https://www.yesbank.in/pdf/q2fy2018_19_press_release_cr_pdf">reported bad loans</a>, a significant exposure to IL&amp;FS, the resignation of the non-executive chairman <a href="https://www.yesbank.in/media/press-releases/yes-bank-announces-resignation-of-chairman-shri-ashok-chawla-from-board-of-directors">Ashok Chawla </a>amid a corruption probe and a series of credit downgrades. SEE ALSO: <a href="https://www.businessinsider.in/indias-central-bank-says-that-yes-bank-is-no-longer-lying-about-its-bad-loans/articleshow/67985953.cms">India’s central bank says that Yes Bank is no longer lying about its bad loans</a> <a href="https://www.businessinsider.in/yes-bank-stock-jumps-on-new-ceo-appointment/articleshow/67685861.cms">Yes Bank's 15-month journey from regulatory crackdown to finding a new CEO</a>

Yes Bank is denying reports that its new CEO Ravneet Gill is getting rid of its top brass.

<ul><li> The Mumbai-based bank posted a loss of ₹600 crore for the three months ended September 2019.</li><li>Yes Bank's share price has lost over 60% of its since the start of this year due to mounting cash crunch and the investors' anxiety with bank's earlier management.</li><li>Gross NPA, a measure of bad loans, spiked to 7.39% in the latest quarter, more than double compared to the first three months of 2019.</li></ul>The Mumbai-based Yes Bank posted a shocking loss of ₹600 crore for the three months ended September 2019. While the revenue fell 20%, costs rose during the quarter squeezing the operating profit by 40%. This is largely due to a sharp spike in bad loans. Gross NPA, a measure of bad loans, jumped to 7.39%— more than doubled compared to the level at the which the number was in the first three months of 2019. Gross NPA rose to ₹17,100 crore— nearly two and a half times more compared to three months ago. The amount of loans that turned sour during the quarter was over ₹5,945 crore. Making matters worse, Yes Bank had to take a one-time tax hit of ₹709 crore. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 In the last quarter ending June 2019, Yes Bank posted as much as ₹114 crore in net profit, 91% less compared to the same period a year earlier. However, it was way better than street predictions that it would post heavy losses. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 “This was a ‘Quarter of Consolidation’ in which the bank has demonstrated strong resilience in revenues and asset quality. We believe that earnings trajectory should strengthen significantly from hereon,” the bank said in a press release three months ago. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 The brokerages have also been worried ever since the stock has been taking a beating since March this year. Over 60% of the bank’s share value has been shaved off since the start of this year. The stock of yes Bank even hit a ten-year low a few days ago, but since then it has doubled. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 Hope floats that there will be a white knight who will bring in the money to help the bank to tide over the current cash crunch. Also read: 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 “YES Bank’s exposure in Anil Dhirubhai Ambani Group stands at around 2.9% of loan book as per recent Ministry of Corporate Affairs (MCA) filings. Apart from this, the bank’s exposure to the DHFL, Indiabulls and Essel groups combined exceeds around 4% of gross loan book,” said a report by Elara Securities on June 26. SEE ALSO: <a href="https://www.businessinsider.in/yes-bank-plans-to-grow-25-by-2020/articleshow/71105078.cms" data-type="tilCustomLink" target="_blank">YES Bank wants to customize branches, ramp up digitize customer acquisition to grow at a breakneck speed of 25%</a> <a href="https://www.businessinsider.in/yes-bank-stock-spikes-11-6-in-early-trade-as-it-stays-clear-of-losses/articleshow/70271361.cms">Yes Bank's share price is not celebrating the surprise profit because it has a capital problem</a> <a href="https://www.businessinsider.in/yes-bank-q1-earnings-report-yes-bank-share-price-q1-earnings-repor/articleshow/70261380.cms">Yes Bank profits dropped 91%-- but it was still way better than expectations</a>

Bad loans take the wind out of Yes Bank— swings to a loss in the second quarter

Each year brings a new plan from the Indian government that is squarely aimed at giving the country’s banks a lifeline as they deal with a <a href="https://www.bloombergquint.com/business/2018/06/26/banks-gross-npas-may-rise-to-over-12-in-fy19-rbi-financial-stability-report">worsening bad loan problem</a>. Last October, it was the initiative to pump ₹2.11 trillion worth of funds into the state-owned banks, the balance sheets of which comprise the major portion of India’s <keyword id="142154" type="PERSON" weightage="20" keywordseo="bad-loans">bad loans</keyword>. The plan has been criticised for not being sufficient to support a growth in lending and mainly helping these banks with their regulatory capital requirements. This year, it’s Sashakt, a scheme for the resolution of assets, as announced by interim Finance Minister Piyush Goyal yesterday. Unlike the recapitalisation plan, this isn’t a bailout and will not require any easing of restrictions from the Reserve Bank of India. It also forgoes the option of <a href="https://www.businessinsider.in/what-is-a-bad-bank-and-how-can-it-fix-indias-bad-loans-problem/articleshow/64541679.cms">establishing a bad bank</a>. The action points for this plan were actually drafted by a government-appointed committee of bankers led by Sunil Mehta, the chairman of the scam-embroiled Punjab National Bank. Here are the main proposals of the scheme:- A national asset management company A national Asset Management Company (<keyword id="6358378" type="ORGANIZATION" weightage="20" keywordseo="amc">AMC</keyword>) will be established to restructure large accounts - those involving sums larger than ₹5 billion. It will be receiving equity capital from foreign private equity firms, alternative investment funds and infrastructure funds. Banks will also be allowed to invest. The AMC will be privately-owned, although the government could take a minority stake in it through an investment fund. Despite the government’s claim that it’s not creating a <keyword id="6605010" type="UNKNOWN" weightage="20" keywordseo="bad-bank">bad bank</keyword>, the asset management company will function like one. It will consolidate all of the bad loans in one vehicle and focus on the liquidation and restructuring of the accounts. However, unlike a bad bank where the loans are simply hived off into a separate vehicle under the aegis of the bank’s parent, the asset management company will have to bid for these accounts in an open auction. Hence, the owner of the stressed account will sell the loan for a price determined by the market and will be paid within two months. AMCs can also bid for assets listed by the National Company Law Tribunal (NCLT), a body mandated by India’s bankruptcy code to deal with large stressed accounts. There could be multiple AMCs created if the need arises, Goyal reportedly said. An additional recommendation involved the creation of a trading platform for stressed assets as well as unstressed accounts. Bank-led solutions for smaller accounts For non-performing accounts that less than ₹500 million, banks will have to set up dedicated units to deal exclusively with the recovery of those accounts and come up with a resolution plan within 3 months of when the account becomes stressed. For accounts in the range of ₹500 million and ₹5 billion, the lead bank has to develop a joint resolution plan with other creditors to the corporate entity within 6 months. The turnaround plan has to be approved by 66% of the creditors to go ahead. In the event that the 6 month-deadline isn’t met or the the creditor vote doesn’t pass, the account will be referred to the NCLT.

India wants to establish a mega-asset manager to tackle its bad loan problem

<ul><li><keyword id="45660" type="CITY" weightage="20" keywordseo="Yes-Bank">YES Bank</keyword> has reported its highest quarterly net <keyword id="6362247" type="UNKNOWN" weightage="20" keywordseo="Profit">profit</keyword> ever since December 2018 at ₹207 crore.</li><li>Shares of YES Bank surged 5% as investors are cheering the company’s highest profit mark in recent times.</li><li>However, analysts remain disappointed with the company on high stress loans and recommend a ‘sell’ rating on the stock.</li></ul>Shares of YES Bank surged 5% on July 26 as the private bank reported a four-fold jump in its net profit to ₹207 crore in June quarter compared to a profit of ₹45 crore the same time last year. This is the highest profit for the private bank since December 2018. While investors cheered YES Bank’s good profit growth in recent years, some analysts remain disappointed with the company on high stress loans and recommend a sell rating on the stock. At 11:36 a.m., on July 26, shares of YES bank were trading 4.98% higher at 13.70 rupees. <div type="image" title="yes banks shares" height="900" width="1200" msid="84751111" hostid="261"></div> The sudden jump in the lender’s profit is because of the lower provisions made for bad loans held with the bank. It has lowered provisions by 88% to ₹644 crore in June. The bank also expects the provision requirement to go down going ahead. However, analysts studying the bank’s fundamentals and financials do not feel the same. “While there is a significant improvement in <keyword id="6357061" type="SPONSORED" weightage="20" keywordseo="earnings">earnings</keyword> in Q1, profitability remains low with return on assets of 0.3%, and stress loans remain uncomfortably high at 29%... We expect credit cost to rise to 2.1% in FY23E [expected] as ageing provisions catch up,” said a report by Elara Capital while recommending a ‘sell’ rating on the stock. Meanwhile, analysts at Kotak Institutional Equities believe that earnings are far too volatile given the impact slippages have on interest income (NII) and provisions. The bank’s capital position is above regulatory requirements, but the flexibility to make higher provisions is quite limited, said the report while maintaining a ‘sell’ rating on the stock. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/yes-bank-has-reported-its-highest-net-profit-since-december-2018-at-207-crore/articleshow/84678691.cms">YES Bank’s net profit grows four fold as provision for bad loans shrink </a> <a href="https://www.businessinsider.in/science/health/news/healthcare-startup-veera-raises-3-million-to-reach-more-pcos-patients/articleshow/84749847.cms">A Wharton MBA grad and a former GSK exec’s healthcare startup raises $3 million to reach more PCOS patients </a>

YES Bank shares surge 5% as investors see a ray of hope after bank reported four fold growth in profit

<keyword id="45660" type="COMPANY" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword> has finally named a successor for its current <keyword id="115930" type="POSITION" weightage="20" keywordseo="Chief-Executive-Officer">chief executive officer</keyword> (CEO), <keyword id="128581" type="PERSON" weightage="20" keywordseo="Rana-Kapoor">Rana Kapoor</keyword>, putting to rest any further uncertainty over the succession process at one of India’s largest private banks. <keyword id="788579" type="PERSON" weightage="20" keywordseo="Ravneet-Gill">Ravneet Gill</keyword> - the head of Deutsche Bank’s Indian operations - is set to take over from Kapoor, who also founded the bank in 2004. Kapoor’s tenure is set to end on 31st January following the Reserve Bank of India’s refusal to extend his term. 
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 Gill’s appointment caps a tumultuous period for Yes Bank, following a clampdown by India’s central bank. Gill is expected to step into the role on March 1st for a three-year term. The move was greeted favourably by equity investors, with the bank’s shares <a href="https://www.google.com/search?q=yes+bank+share+price&amp;rlz=1C1GCEU_enIN820IN820&amp;oq=yes+bank+share+price&amp;aqs=chrome..69i57j0j69i60l3j0.2433j0j4&amp;sourceid=chrome&amp;ie=UTF-8">surging 16%</a> in the last session of trading on Thursday. Here all the events leading up to the announcement:- October 23rd, 2017 The <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> levied <a href="https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=42050">a ₹60 million fine</a> on Yes Bank after a sector-wide risk review found that the private lender had under-reported a series of non-performing loans in its financial statements for the year ended March 2016. The fine followed a notice issued to the bank the preceding July for its failure to report a cybersecurity attack at its ATM network. According to the RBI, this amounted to a refusal to accept liability for the loss of customers’ information. June 12th, 2018 At an annual shareholders’ meeting, Yes Bank’s shareholders voted to give Rana Kapoor <a href="https://www.bseindia.com/xml-data/corpfiling/CorpAttachment/2018/6/f8d7297d-dbbc-4a80-b910-bd0be88b546f.pdf">another three-year term</a> as the bank’s CEO starting September 1st. Kapoor’s re-appointment did, however, depend upon a greenlight from the central bank. 
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 August 30th, 2018 After deliberating <a href="https://www.thehindubusinessline.com/money-and-banking/yes-bank-awaits-rbi-approval-to-reappoint-rana-kapoor-as-ceo/article24803656.ece">for more time than was initially expected</a>, the RBI approved Yes Bank’s decision to have Kapoor continue in his role as Managing Director and CEO a day before his term was set to expire. The approval came with a slightly suspicious caveat: Rana Kapoor was allowed to continue as CEO <a href="https://www.bseindia.com/xml-data/corpfiling/AttachLive/4b4b2947-7e80-4013-878d-6c3330117be5.pdf">‘till further notice</a>’. September 19th, 2018 In a glaring about-turn, the RBI refused to extend Rana Kapoor’s tenure as CEO of Yes Bank, giving him four months (until January 31st, 2019) to vacate the position. The move had precedence. Earlier in the year, the central bank refused to clear a three-year extension of the tenure of Shikha Sharma, the CEO of Axis Bank, as the bank dealt with its own host of bad loan calculation problems. September 20th, 2018 Yes Bank’s share price plummeted by over 29% on the first day of trading since the RBI’s decision was announced - a loss of nearly $3 billion worth of market capitalisation. The price drop exacerbated a freefall in Yes Bank’s share price since August, which culminated in the loss of <a href="https://www.businessinsider.in/one-of-indias-largest-private-banks-has-lost-more-than-half-its-market-value-in-37-days/articleshow/65991141.cms">half the bank’s market value.</a> September 25th, 2018 The board of directors of Yes Bank met to assess the situation. At <a href="https://www.yesbank.in/media/press-releases/outcome-of-board-meeting-25-sep-2018">the meeting</a>, they decided to request the RBI to reconsider its decision. They wrote to the RBI asking for an extension for Kapoor’s tenure till at least the end of April 2019 to finalise the bank’s year-end financial statements. The board also set up a search committee to find a replacement for Kapoor. October 1st, 2018 CARE Ratings, a credit ratings agency, placed Yes Bank’s debt on <a href="https://www.yesbank.in/media/press-releases/developing-implications-by-care-ratings">‘credit watch with developing implications’</a>, causing further investor jitters. October 17th, 2018 The RBI rejects the request submitted by Yes Bank’s board of directors seeking a minor extension for Kapoor. To allay investor fears, Yes Bank says that it should conclude the CEO search process by mid-December 2018. October 19th, 2018 Rana Kapoor <a href="https://www.livemint.com/Companies/SVfWpr650CG79vvcqXlydL/Yes-Bank-CEO-Rana-Kapoor-meets-rival-promoter-Madhu-Kapur-s.html">met with another Yes Bank promoter Madhu Kapur</a>, the wife of Yes Bank’s co-founder - the now-deceased Ashok Kapur, to discuss a possible formation of a single promoter group, ending a decade-long dispute and paving the way for a smooth succession plan for the bank. October 25th, 2018 Yes Bank posted <a href="https://www.yesbank.in/pdf/q2fy2018_19_press_release_cr_pdf">a 4% drop</a> in net profit for the quarter ended September 2018 owing to higher provisions for loan losses. Gross <keyword id="142154" type="PERSON" weightage="20" keywordseo="bad-loans">bad loans</keyword> also rose by 37% on a sequential basis, resulting in a bad loan ratio of 1.6% as opposed to 1.3% the previous quarter. To make matters worse, the lender also disclosed a ₹26 billion to the near-bankrupt IL&amp;FS. November 14th, 2018 The bank’s non-executive chairman, Ashok Chawla, <a href="https://www.yesbank.in/media/press-releases/yes-bank-announces-resignation-of-chairman-shri-ashok-chawla-from-board-of-directors">submitted his resignation</a> owing to the fact that he was the <a href="https://www.businessinsider.in/yes-banks-problems-get-further-compounded-as-its-chairman-is-forced-to-resign-amid-a-corruption-probe/articleshow/66634836.cms">subject of a corruption probe</a>. In July 2018, Chawla, who was also the chairman of the National Stock Exchange of India (NSE), was named in a chargesheet filed by the Central Bureau of Investigation in relation to the Aircel-Maxis case. In its announcement, Yes Bank said that it needed a chairman that could devote more attention to the bank as it navigated the management transition period. November 27th, 2018 Following a number of resignations from Yes Bank’s board, Moody’s Investors Service <a href="https://www.moodys.com/research/Moodys-downgrades-Yes-Banks-ratings-changes-outlook-to-negative--PR_392036">downgraded </a>Yes Bank’s credit rating to non-investment grade and changed the bank’s outlook to negative from stable. November 29th, 2018 News reports emerged that Rana Kapoor was seeking to maintain control of Yes Bank by <a href="https://www.livemint.com/Companies/FAMv2Atixphj1fprI0DYpI/Rana-Kapoor-eyes-Yes-Bank-chairman-seat-after-exit-as-CEO.html">taking over the chairmanship</a> of the company. The move, however, never came to fruition. December 3rd, 2018 T S Vijayan, was appointed to Yes Bank’s board as an independent director for five years. The move was expected, given that former chief of LIC and the Insurance Regulatory and Development Authority (IRDAI) was also on the CEO search and selection committee. January 10th, 2019 The board of directors of Yes Bank submits a list of potential CEO candidates to the RBI for the latter’s approval. The board highlights Gill as their most preferred candidate to take over the role. January 12th, 2019 Yes Bank named Brahm Dutt as its new non-executive chairman on a part time basis. A board member since 2013, Dutt’s tenure is capped till July 2020, when he is scheduled to turn 70 years old. SEE ALSO: <a href="https://www.businessinsider.in/yes-banks-problems-get-further-compounded-as-its-chairman-is-forced-to-resign-amid-a-corruption-probe/articleshow/66634836.cms">Yes Bank’s problems get further compounded as its chairman is forced to resign amid a corruption probe</a> <a href="https://www.businessinsider.in/one-of-indias-largest-private-banks-has-lost-more-than-half-its-market-value-in-37-days/articleshow/65991141.cms">One of India’s largest private banks has lost more than half its market value in 37 day</a>s

Yes Bank's 15-month journey from regulatory crackdown to finding a new CEO

<ul><li><keyword id="45660" type="COMPANY" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword>’s share price has nearly halved in the past one year, but analysts don’t recommend investors to ‘buy.’</li><li>Even at ₹13.55 per share, there’s a chance that the stock is overvalued.</li><li>Experts believe that Yes Bank may go for another round of funding in the near future to try and shore up its provisions as the second wave of pandemic bears down.</li></ul>When the <keyword id="6354335" type="COMPANY" weightage="20" keywordseo="reserve-bank-of-india">Reserve Bank of India</keyword> had to rescue Yes Bank from collapsing in March 2021⁠ — the same time the pandemic hit us all unexpectedly ⁠— the double blow had taken the wind out of the share price that hit a low of ₹23.95. . Today, it is at ₹13.55 — nearly half of what it was a year go. This, 14 months after the RBI placed Prashant Kumar, the former deputy managing director of the State Bank of India, to save Yes Bank from becoming rubble. At the same time, its peers have made money for their investors while those betting on Yes Bank, or finding a bargain any time in the last one year, have been left disappointed. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Change in share price from 6 March 2020 to 6 May 2021 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Yes Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-16.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">25.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HDFC Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Axis Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8.8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">9.6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">IndusInd Bank </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-8.9% </td></tr></tbody></table>Source: NSE The latest shock was a ₹3,788 crore net loss in Jan-March 2021 triggering a fresh bout of ‘sell’ calls. Some of those targets, set for any time in the following 12 months, have already been hit. That’s how fast the stock has been falling. Yet, even at this price, analysts aren’t gutsy enough to say ‘buy’. “The real value may be much lower, if you look at book value compared to other banks,” Vikram Sud, chairman and consultant at VSS Advisors and an independent director on the board of DBS Bank, told Business Insider. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Target Price </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Recommendation </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">ICICI Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 15 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sell </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Emkay Global </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹10 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sell </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nirmal Bang </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹12 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sell </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Kotak Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹12 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sell </td></tr></tbody></table>Source: Respective reports A year earlier, between January and March 2020, people who had an inkling that the company — at the time run by Rana Kapoor who is currently lodged at Taloja Jail — was running on fumes, had already been withdrawing their money. The average depositor followed later. These small deposits, also called CASA (current account-savings account) ratio, are the cheapest source of funds for any bank to make money. There is no run on the bank anymore and so, this number has shown remarkable growth in the last three months. For every ₹10 that depositors had parked in the bank a year ago, there is now ₹15.2. "In the next3years, we continue to stay focused on doubling the deposit book and increasing the customer base to almost 3 times. And we also aim to improve our CASA ratio to 40% and double the cross-sell ratios," Kumar said during Yes Bank's fourth quarter earnings call. However, the street is suspicious of that number too. “If you ask, any customer would not be confident about putting their money in Yes Bank right now. I don’t know if they have enough transparency around what kind of customers are the ones who can give them these deposits,” an analyst from Emkay Global told Business Insider. <cmsannotation type="cmsannotation" annotationid="The depositors’ confidence, or the lack of it, is not the only fear about Yes Bank" comment="subhead" text="The depositors’ confidence, or the lack of it, is not the only fear about Yes Bank">The depositors’ confidence, or the lack of it, is not the only fear about Yes Bank</cmsannotation> The problem with Yes Bank was that, under Rana Kapoor, it had given a lot of loans that wouldn’t return and it kept brushing the bad loans under the carpet until there was a lot more than it could hide. The issue of the elusive borrowers may still persist. Even in the first three months of 2021, the lender had to write off a little more than ₹6 out of every ₹100 it gave out. The amount of such stressed loans, ones that are more likely to turn sour, is still high even though it is a fourth of what it was just three months earlier. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup></colgroup></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Yes Bank’s latest financials </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Jan-March 2021 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Change </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Net interest income </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹987 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-22.5% (YoY) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Net loss </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹3,787.75 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-244.1% (YoY) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Provision for bad loans </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹5240 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">138.3% (QoQ) </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Gross NPA </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15.41% </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">6 bps (QoQ) </td></tr></tbody></table>Source: Yes Bank’s earnings report for Q4 2021 and Q4 2020 <cmsannotation type="cmsannotation" annotationid="Yes Bank CEO wanted to dump bad loans but couldn’t" comment="subhead" text="Yes Bank CEO wanted to dump bad loans but couldn’t">Yes Bank CEO wanted to dump bad loans but couldn’t</cmsannotation> The private bank’s plan was to get a licence from the Reserve Bank of India (RBI) to set up a separate asset reconstruction company (ARC). This ARC would buy the bank’s bad loans at a discount, help it clear the balance sheets, and start growing from there. According to the bank’s chief executive, Prashant Kumar, Yes Bank was hoping to deposit nearly ₹50,000 crore of bad loans to the ARC. However, the RBI turned down that request in March <a href="https://www.livemint.com/industry/banking/rbi-rejects-yes-bank-s-proposal-to-set-up-arc-11615722649056.html">citing</a> a conflict of interest. “Once the stock climbed back up [last year], they [Yes Bank] told investors they would want to apply for a separate ARC and they were confident of getting permission from the RBI, where they would basically park all the bad assets. But that didn’t happen,” said Emkay Global. However, according to Kumar, the option of setting up an ARC is still on the table. "That option is still alive and we would be waiting for more clarification to come from regulator after the report of the expert committee which they have made would come out," he said. Meanwhile, experts believe that Yes Bank may go for another round of funding in the near future to try and shore up its provisions as the second wave of pandemic bears down. “Market discounts all the knowledge that is known as of today. If new information comes out tomorrow, then the stock will react accordingly,” said an analyst on the condition of anonymity. 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Yes Bank shares are cheaper than what they were a year ago — and what could revive the investment, if at all

<ul><li>Yes Bank’s net profit stood at ₹114 crore for the first quarter of 2019-20, which fell by a massive 94.4% from the same quarter last year, at ₹1,265 crore. </li><li>Its non-performing assets or loans that have turned bad, stood at ₹6,883 crore. </li><li>The bank’s net interest income grew 2.8% y-o-y to ₹2,281 crore during the quarter. </li></ul> Yes Bank posted as much as ₹114 crore in net profits for the first quarter of 2019-20, beating street predictions that it would post heavy losses. However, its profits fell by a massive 91% from the same quarter last year, at ₹1,265 crore. In addition, the report has a lot of cause for worry. Its provisions which is the amount a bank sets aside in case a loan goes bad, is at a massive ₹1,785 crore, which ballooned from ₹625 crore in the same quarter last year. As per the bank’s earnings report, its non-performing assets or loans that have turned bad, stood at ₹6,883 crore. An NPA account with an exposure of ₹411 crore was sold to an asset restructuring company during the quarter, the bank had said. ‘Quarter of Consolidation’ The bank’s net interest income grew 2.8% y-o-y to ₹2,281 crore during the quarter. This is in spite of absorbing an impact of ₹223 crores of interest reversals on account of slippages during the quarter, the bank said. “This was a ‘Quarter of Consolidation’ in which the bank has demonstrated strong resilience in revenues and asset quality. We believe that earnings trajectory should strengthen significantly from hereon,” the bank said in a press release. In anticipation of possible losses, the bank’s stock closed 5.2% lower in today’s trade, at ₹98.4. A Kotak Equities had forecasted that Yes Bank will<a href="https://economictimes.indiatimes.com/markets/stocks/earnings/yes-bank-q1-results-on-wednesday-will-it-be-a-second-straight-loss-for-the-bank/articleshow/70239656.cms"> post as much</a> as ₹500 crore in losses. Brokerages believed that this quarter too, like last quarter would end in red, when it had posted a loss of ₹1,508 crore. The brokerages have also been worried ever since the stock has been taking a beating since March this year. As much as 50% of the bank’s value was shaved off, after the banking regulator insisted that its founder Rana Kapoor step down, over allegations that it has not been making disclosures on its asset quality as per norms. The quality of the bank’s assets has been a cause for worry to investors and analysts alike. “YES Bank’s exposure in Anil Dhirubhai Ambani Group stands at around 2.9% of loan book as per recent Ministry of Corporate Affairs (MCA) filings. Apart from this, the bank’s exposure to the DHFL, Indiabulls and Essel groups combined exceeds around 4% of gross loan book,” said a report by Elara Securities on June 26. SEE ALSO <a href="https://www.businessinsider.in/business/yes-bank-share-price-rises-hoping-for-a-buyer-ahead-of-earnings/articleshow/70248683.cms">Yes Bank’s investors are desperate for a buyer amid fears of a massive quarterly loss</a>

Yes Bank profits dropped 91%-- but it was still way better than expectations

<ul><li><keyword id="45660" type="COMPANY" weightage="20" keywordseo="Yes-Bank">Yes Bank</keyword>, which is India’s third-largest private sector lender, has lost more than half its <keyword id="6463972" type="UNKNOWN" weightage="20" keywordseo="market-value">market value</keyword> since 20 August as it deals with succession and compliance issues. </li><li>On 20 September, the <keyword id="30067" type="ORGANIZATION" weightage="20" keywordseo="RBI">RBI</keyword> refused to extend the tenure of Yes Bank <keyword id="5645" type="POSITION" weightage="20" keywordseo="CEO">CEO</keyword> <keyword id="128581" type="PERSON" weightage="20" keywordseo="Rana-Kapoor">Rana Kapoor</keyword>’s term, which precipitated a dramatic <keyword id="5683" type="ENTERTAINMENT" weightage="20" keywordseo="Crash">crash</keyword> in the bank’s share price. </li><li>Following a risk review by the RBI last year, it came to light that Yes Bank had underreported ₹63.6 billion worth of non-performing loans. </li></ul>As a central banking regulator, the Reserve Bank of India can usually be counted on to support the banking sector and ensure the health of the institutions it oversees. However, in the wake of its attempts to clean up a system riddled by bad loans, it might have facilitated the downfall of some banks. Yes Bank, which is India’s third-largest private sector lender, has lost <a href="https://www.google.co.in/search?q=yes+bank+share+price&amp;oq=yes+bank+share+price&amp;aqs=chrome.0.0l6.4046j0j7&amp;sourceid=chrome&amp;ie=UTF-8">more than half</a> its market value since 20 August - from ₹910 billion to ₹438 billion-, as its share price has been in a freefall. Investors feared that the RBI would not approve the extension of the CEO Rana Kapoor’s tenure, which was set to expire on 31 August. Those fears were confirmed last week, when the RBI <a href="https://economictimes.indiatimes.com/industry/banking/finance/banking/rbi-allows-rana-kapoor-continue-as-yes-bank-md-ceo-till-january-end/articleshow/65875341.cms">refused to extend</a> Kapoor’s term, capping it at 31 January 2019, which precipitated a dramatic crash in the bank’s share price. On 20 September, when the decision was announced, the bank’s stock fell by a whopping 29% as the fears and uncertainty over its future leadership became compounded. That marks a loss of over $3 billion in market value on one day alone. Rana Kapoor founded the bank in 2004, steering it towards a dramatic rise in the ensuing decade. However, in his quest to expand the bank’s operations and loan book at a rapid pace, a number of issues were overlooked. Following a risk review by the RBI in October last year, it came to light that Yes Bank had underreported ₹63.6 billion worth of non-performing loans. There were also allegations that the bank had direct dealings with a trust run by Kapoor’s family and that it had window-dressed some of its large corporations to look financially stronger than it actually was. As the country grappled with a bad loan crisis, the RBI wasn’t in a forgiving mood. Since then, the future of Kapoor has been under intense speculation. Earlier this year, the RBI also refused to clear a three-year extension of the tenure of Shikha Sharma, the CEO of Axis Bank, as the bank dealt with its own host of bad loan calculation problems. To reassure investors and stabilise its share price, Yes Bank could have announced a successor for Kapoor this week. However, on 25 September, it wrote to the RBI again asking the regulator to reconsider its decision to trim Kapoor’s tenure, asking for an extension till September 2019. The RBI is expected to decline the bank’s request. That being said, the bank has set up a search committee to find a replacement for Kapoor. In addition to this, their immediate priority should be to draw up an effective turnaround plan in order to limit any further damage to their market cap.

You Searched For "Yes Bank bad loans" and got 12 results

What bothers Yes Bank does not bother its bigger peers as much

Katya Naidu

India’s central bank says that Yes Bank is no longer lying about its bad loans

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Yes Bank added over 90 pc of gross bad loans during nine months ended Dec 2019

PTI

Yes Bank Crisis: Congress raises question over Rana Kapoor's links with BJP

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Yes Bank is denying reports that its new CEO Ravneet Gill is getting rid of its top brass.

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Bad loans take the wind out of Yes Bank— swings to a loss in the second quarter

Sriram Iyer

India wants to establish a mega-asset manager to tackle its bad loan problem

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YES Bank shares surge 5% as investors see a ray of hope after bank reported four fold growth in profit

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Yes Bank's 15-month journey from regulatory crackdown to finding a new CEO

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Yes Bank shares are cheaper than what they were a year ago — and what could revive the investment, if at all

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Yes Bank profits dropped 91%-- but it was still way better than expectations

Katya Naidu

One of India’s largest private banks has lost more than half its market value in 37 days

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