Yes Bank shares rebound on Friday for the first time in last six consecutive sessions, rising nearly 7 percent in morning after the management clarified its stance on ownership in Morgan Credits, exposure to developers and current financial situation of the lender.
The stock seems to be oversold after falling nearly 19 percent in the last five straight sessions to hit the lowest level since March 2, 2016. It also seems to have priced in negatives related to downgrades by ICRA and its parent firm Moody's.
The scrip was quoting at Rs 170.65, up Rs 10.20, or 6.36 percent on the BSE, at 10:06 hours IST.
Rajat Monga, Senior Group President at Yes Bank told CNBC-TV18 that MD & CEO, Rana Kapoor doesn't have any ownership in Morgan Credits or Yes Capital.
Recently, a media report said Yes Bank chief Rana Kapoor's investment firms borrowed money from mutual funds and invested it as equity in a finance company. But in a clarification sought by stock exchanges, the bank said that it is not involved in any way with these companies.
Morgan Credits Pvt Ltd (MCPL) and Yes Capital (I) Pvt Ltd (YCPL) are holding companies owned 100 percent by Radha K Khanna, Raakhe K Tandon and Roshini Kapoor (Rana Kapoor's daughters). Both these promoter shareholders of Yes Bank said they had raised some funds to meet their growth objectives and have no commercial dealings with the private sector lender.
On the stake held by Rana Kapoor, Monga said he doesn't think there is any pressure on Kapoor to sell his stake.
Total promoter shareholding in the bank stands at 19.91 percent as per latest data available on the exchanges, of which Rana Kapoor holds 4.33 percent and Madhu Kapur 7.59 percent in the lender.
Yes Capital India, Morgan Credits and Mags Finvest combined have 7.99 percent shareholding in the bank.
Monga said overall bank's exposure to housing finance companies stood at 3.2 percent, of which 90 percent is rated A or better. "We have exposure to developers at 5.6 percent with no SMA-2 loans in this segment."
Reports about Rana Kapoor eyeing chairman seat has been taken out of context, he said, adding chairman post at all private banks is held by 'independent' individuals.
He said the board is looking to appoint a chairperson & finding a new CEO. So the issue of capital raising should be taken up after new CEO appointment.
Yes Bank's board of directors will be meeting on December 13 to recommend names for new chairman to be approved by the RBI as well as consider appointment of independent directors.
Total capital adequacy of the bank right now is at 17 percent and capital stood at Rs 51,000 crore against Rs 200 crore 15 years ago, Monga said.
Analysts raised concerned over bank's divergence reported for FY16 and FY17, which was higher at Rs 4,176.7 crore and Rs 6355.2 crore respectively.
"Divergence has not been a risk issue; it is more of a compliance issue," Monga said, adding divergence audit took place in Q2FY19 and it does not have the findings yet.
He said asset quality in second half of FY19 will be better than first half barring IL&FS exposure.
ICRA on Wednesday downgraded Yes Bank's long-term ratings after its parent company Moody's downgraded the bank citing poor corporate governance on Tuesday.
"The rating downgrade considers the series of resignations from the board of directors (Ashok Chawla, Vasant Gujarathi, and Rentala Chandrashekhar who quit in November), which raises concerns on corporate governance at the bank," ICRA said.
The agency also warned of further downgrades if there are adverse developments on any of the above factors and added stability in deposit base is a key monitorable. The capital cushion for the bank has been "weakening" vis-a-vis the regulatory requirements, it added.
The bank has been facing troubles since mid-September, when the RBI curtailed the term of its chief executive Rana Kapoor, who is also among the promoters. Since then, the stock lost more than 60 percent of its value.
On Tuesday, Moody's Investors Service downgraded the bank's ratings to non-investment grade and changed outlook to negative from stable.
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