Yes Bank Tries To Calm Frayed Nerves
Yes Bank Ltd. today tried to reassure its investors ahead of a board meeting to decide future course of action after the Reserve Bank of India cut short the term of its Chief Executive Officer and Managing Director Rana Kapoor.
“At the outset, the Bank would like to inform its stakeholders that the Bank and its MD and CEO will be fully guided by its Board of Directors (meeting scheduled on Sept. 25, 2018), the Reserve Bank of India and other relevant stakeholders,” the private lender said in a media statement. “The Bank's management remains committed to protect the interests of all of its stakeholders.”
Last week, the banking regulator gave Rana Kapoor only four additional months at the helm of the Mumbai-based lender. That led to a panic-driven selloff in its shares with brokerages citing a number of challenges that the lender may face. The stock fell as much as 34 percent before recovering slightly to close 29 percent lower on Friday. The fall shaved off over Rs 21,000 crore from Yes Bank's market capitalisation.
In its statement today, Yes Bank said that it has demonstrated a consistent track record across all critical parameters. It reiterated its growth rate, credit cost guidance, credit ratings from various agencies, and some of the accolades it won recently.
Kapoor has led Yes Bank through a decade of rapid growth but his leadership came into question after RBI pointed out discrepancies in the way the lender reported bad loans. RBI noted a bad loan divergence of Rs 4,176 crore in the year ended March 2016, and an even higher Rs 6,355 crore in the following financial year.
His exit could slow growth and delay fundraising plans of the bank, brokerages have said. It would also result in a material downside for the stock, according to some of the analysts.
The Yes Bank stock closed 0.73 percent down today while the benchmark S&P BSE Sensex closed 1.46 percent lower.