oppn parties Yes Bank: Sinking Into A Morass

News Snippets

  • Calcutta HC said that an accused in a NDPS case is not entitled to default bail if a charge sheet, even without the chemical report, is filed within time
  • 21 killed in a hooch tragedy in Amritsar. Police arrested 10 persons
  • Incoming CJI Justice B R Gavai said that he will always strive for social and political justice
  • Although US Prez Donald trump once again claimed his administration brokered the ceasefire between India and Pakistan, India clearly refuted the claim and said it was workd out by the DGMO
  • Centre tells the Supreme Court that since women are not in combat roles, there has to be a separate selection board for them
  • India briefs 70 nations on Operation Sindoor
  • PM Modi asks Pakistan to vacate illegally-occupied portions of Kashmir
  • PM Modi tells Pakistan that it faces annihilation if it does not stop supporting terror
  • PM Modi visits Adampur IAF base, poses before the S-400 surface-to-air defence system to destrot Pakistan's claim that it had bombed the base and destroyed the defence system
  • 5 US companies make offers to GAIL for stake in LNG projects
  • Retail inflation dipped to 3.2% in April, the lowest since July 2019
  • Stocks tumble on Tuesday: After the all-time single-day gain on Monday, stocks lost heavily on Tuesday - Sensex went down by 1281 points to 81148 and Nifty lost 346 points to 24578
  • Indian tour to England: A new look Indian team with a new skipper will be announced when the selectors meet later this week in view of the retirement of Virat Kohli, Rohit Sharma and R Ashwin
  • IPL: Most overseas players to return and teams likely to be full strength
  • Sharad Pawar calls for an all-party meet to discuss Operation Sindoor, says such matter cannot be publicly discussed in Parliament as the Congress had earlier demanded
PM Modi warns Pakistan - stop supporting terror or face annihilation /////// Also asks Pakistan to vacate illegally-occupied portion of Kashmir
oppn parties
Yes Bank: Sinking Into A Morass

By A Special Correspondent

Yes Bank shares tumbled nearly 13% to close at Rs 85.90 today. This has been a steep fall from the price a year ago which was ruling at Rs 404. The nearly 80 percent fall in a year has meant that Rana Kapoor, the co-promoter of the 4th largest bank in India, has lost about Rs 7000 crore on his 10 percent holding in the bank.

The drop in price on Thursday was due to the fact that the bank reported quarterly earnings on Wednesday that showed that its bad loan ratio had widened even as the capital buffers had weakened considerably. This created panic selling in the market, leading to a rout. The slide is expected to continue as analysts in financial service firm Jefferies have downgraded the price forecast for the bank from Rs 80 to just Rs 50 saying that the current results are "far worse than we had anticipated".

Yes Bank was pulled up by the RBI over its bad debt accounting policies in 2018. The apex bank trimmed the tenure of MD & CEO Rana Kapoor and asked him to step down by January 31, 2019. The Board of the bank selected ex-MD of Deutsche Bank, Ravneet Gill and his appointment was approved by the RBI. But ever since the RBI intervention, the bank's shares have taken a beating at the bourses as reports came out tumbling that the bank had window-dressed its balance sheet.

Although Ravneet Gill has now said that asset quality troubles have peaked and that the house is back in order, the erosion of capital buffers means that there is more, and serious, trouble in store for the bank. It has to raise capital and since share prices are going south, it will be extremely difficult. A watchlist that has Rs 10000 crore of potentially stressed loans and a book of Rs 29000 crore below-investment-grade exposure do not make for a very rosy picture. Gill's business acumen and experience alone will not be enough to lift Yes Bank from the morass it seems to be sinking into.