Yes Bank allays investor concerns, says have ‘enough liquidity’; stock jumps

  • Shares of Yes Bank jumped nearly 26% on Thursday
  • Rajat Monga, group president and CFO at the bank, has decided to move on from Yes Bank

New Delhi: Yes Bank managing director Ravneet Gill, in a conference call held for investors, analysts and other stakeholders on Thursday, allayed investor concerns, saying the bank has “enough liquidity”, according to market sources.

“The current macroeconomic slowdown has impacted bank’s asset quality. We are fairly confident that there is no incremental stress building on the bank’s loan book. We have been able to keep accounts with large exposures standard and see huge potential in recoveries from the underlying accounts,” a market source said, quoting the bank’s management at the conference call.

Shares of Yes Bank jumped nearly 26% on Thursday, bucking the weakness in broader market. At 10:15 am, the stock traded at ₹40. The Sensex, and Nifty were down about 0.5% each.

The bank, at the conference call, also said Rajat Monga, group president and chief financial officer at the bank, has decided to move on, ending his association with the private lender since inception in 2004. Monga, who was in the race to become the bank’s chief executive officer to succeed founder Rana Kapoor, divested his entire stake for ₹8.22 crore during September 18-20.

Many senior management officials, including Monga, have sold shares in the bank since July 25. On Tuesday, shares of Yes Bank plunged 23% after forced sale of 10 crore equity shares, representing 3.92% of the bank’s equity share capital. In an exchange filing on Wednesday, the bank said a large stakeholder invoked shares pledged with it, following which the entire pledge stood extinguished.

“It was a personal decision to sell equity shares. Do not want to specifically comment on it,” another market source said quoting Gill.

Amid the bank’s stock losing value every day, the management spoke on concerns surrounding declining asset quality, liquidity situation, and exposure to large groups with weak financials. The management assured that they were fully confident on aspects such as recoveries from NPAs and improvement in deposits, market sources said.

On Wednesday, Yes Bank said it had liquidity coverage ratio in excess of 125% as on September 30, well above the minimum regulatory requirement of 100%.

Gross advances aggregated to ₹2.32 trillion as on September 30 compared with ₹2.42 trillion as on June 30, with a higher share of retail advances. The reduction in advances was effected to enhance capital efficiency. Deposits aggregated to ₹2.09 trillion as on September 30, while CASA ratio improved to 30.8% from 30.2% as on June 30.

Source: Livemint

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