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YES Bank asserts strong show ahead of official Q2 to stem share price fall

YES Bank says fully geared for Rana Kapoor's succession

Nikhat Hetavkar  |  Mumbai 

YES Bank net profit up 32%; board okays 5:1 stock split

Private lender said it is all geared up for the succession of the bank’s MD & CEO Rana Kapoor, whose term was cut short to January 31 by the central bank. In an attempt to counter the bank’s dipping share prices, it also revealed key performance figures for the September quarter.

The bank’s stock, which had been falling for the past two days owing to uncertainty surrounding its succession plan, has seen an uptick following this announcement. The stock closed at Rs 201.80 on BSE, up by nearly 10 per cent from the previous close.

“We will decide the successor before January, and are not depending on an extension (of Kapoor’s term),” said Rajat Monga, senior group president, while addressing an analysts’ call on Monday. Monga said the options sent to the regulator would be a combination of internal and external candidates. However, it has still not been decided whether Kapoor would continue as director or not, he said.

CARE Ratings placed the various debt instruments of on “credit watch” with developing implications on Saturday. “Kapoor has been instrumental for the bank’s growth since its inception, and the selection of his successor would be critical for the future prospects of the bank,” maintained the ratings agency.

Last week, the bank announced plans to seek permission from the Reserve Bank of India (RBI) for an extension of Kapoor’s term as Managing Director (MD) and Chief Executive Officer (CEO), which led to the bank being accused of not having a proper succession plan in place. The bank had set up a ‘‘Search and Selection Committee” in accordance with the RBI’s letter, which instructed the former to search for Kapoor’s successor. The bank on Monday said names of the two external experts would be finalised by October 7. had appointed two senior leaders Rajat Monga and Pralay Mondal as executive directors, pending approval for long-term succession planning.

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Monga said appointing executive directors was needed to keep “the second line of management” ready and “balance the board”.

The committee comprises three existing board members of Nomination & Remuneration Committee — Brahm Dutt, Chairman and Independent Director, Mukesh Sabharwal, Independent Director and Subhash Kalia, Non-executive Non-independent Director in addition to the two external experts.

The bank also announced its un-audited financial position as on September 30, 2018, ahead of Q2 results. The bank’s deposits grew 41 per cent over last year September quarter aggregating Rs 2.23 trillion as on September 30, 2018. Its current and saving accounts (CASA) ratio stood at 33.8 per cent in September, against 37.2 per cent in the year-ago quarter.

The bank’s loans and advances grew by 61.5 per cent over the year-ago quarter aggregating to Rs 2.40 trillion as on September 30, 2018 of which Domestic Advances aggregated to Rs 2.20 trillion (growth of 56.4 per cent YoY), said the bank in a press statement on Monday.

The bank asset quality improved at 1.35 per cent as on September 30 2018, against 1.82 per cent as on September 30, 2017.

“Over the past few days, some unfounded speculations regarding the bank’s asset quality have been brought to its notice. In this context, management clarifies that the asset quality continues to be stable and reiterates its credit cost guidance at 50-70 bps for FY19 (76 bps for FY18),” said the lender.

YES Bank asserts strong show ahead of official Q2 to stem share price fall

The Bank added that it has a Liquidity Coverage Ratio (LCR) of 101 per cent as on September 30, 2018, which is 11 per cent points in excess of the minimum regulatory requirement of 90 per cent. The bank’s average daily LCR for Q2FY19 was 100 per cent.

“The bank’s liquidity position will further benefit from the recent measures (announced on September 27, 2018) to ease systemic liquidity which will take effect on October 01, 2018,” it said.

First Published: Mon, October 01 2018. 16:13 IST
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