Every organisation in its lifecycle has a reset and this is the reset phase as far as Yes Bank is concerned. It is re-characterisation of the bank that is taking place right now. This is not just being driven by factors that were thrust upon the bank but also because of changes in the financial market, competitive landscape and regulations, says Ravneet Gill – MD & CEO of YES BANK.
Currently Yes Bank’s first priority is management and board stability. Second is asset quality.
Market looks at what happened when other banks came up with watch lists. In our case, there are a handful of names that are facing liquidity issues. These are not names that are in one industry, or sector. There are resolutions underway. In some cases, it is asset sale. It may not be visible to the market. The asymmetry of information is creating the confusion. Concerns around asset quality are overblown. The reason for this is not enough resolutions. When resolution is happening in NCLT, the dissemination of information is better.
Mr. Ravneet Gill further added, regarding the NPA scenario, currently our numbers are not being trusted. It has nothing to do with our numbers. They have seen lightning strike twice, and the normal tendency is if it has struck twice, it can strike a third time. The understanding around the issue has to be more nuanced. In the March quarter, our sub-standard book went up from Rs 6,000 crore to Rs 20,000 crore. When you see a three time increase, it is of great concern. What needs to be understood is that there are three or four names that made Rs 6,000 crore go to Rs 20,000 crore. They have issues around liquidity but have assets that have equity value in them. Through divestment or stake sale, they can come out of illiquidity.
On underwriting standards, Mr. Ravneet Gill said, historically, the bank’s provisioning has been very strong. Risk management was of a very good order. The issue that we have to understand is when the NBFC crisis happened there was tightening of liquidity. We realised refinancing was not so easy and the risk appetite came down. These companies become more vulnerable to the financial market dislocation than the others. Because of mutual fund crisis, the whole promoter funding came under pressure. Suddenly, the operating company was doing well but the valuation was reflecting promoter distress. It was a combination of NBFC sector, promoter funding, and the infrastructure financing crisis.
Talking about raising equity; private equity is an external validation that somebody has looked at stuff which is not in public domain. It becomes source of long-term capital and in some ways they can bring best governance practices by virtue of being invested companies. We are looking at both public market and private equity transactions.
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Sign me up for the newsletter!
Notify me of follow-up comments by email.
Notify me of new posts by email.
Kia Seltos bookings begin on 16th July
TikTok Partners with National Skill Development Corporation (NSDC) to support Skill Development in India and celebrate World Youth Skills Day 2019
MMR to see nearly 13.6 mn sq. ft. of new mall space by 2022
NXP Partners with TCS to Transform its Enterprise Supply Chain IT Operations with ignio™
Circular multi-bushing with gel technology No pre-pricking necessary!
2014 The Global Indian New Network (TGINN)