India’s shadow banking woes that emerged last September have revealed cracks in YES Bank’s balance sheet. The country’s fourth-largest private-sector bank has $2.9 billion of exposure to junk-rated firms, including Dewan Housing Finance Corp, and parts of Anil Ambani’s conglomerate, companies
at the heart of the unfolding crisis.
Gill said he has been “personally involved on a day-to-day basis,” in dealing with large companies
facing repayment difficulties, including for loans extended to Ambani’s firms, Dewan and the Essel Group. The three account for about two-third of the Rs 10,000 crore of loans on the lender’s watchlist, he said.
This list won’t see any significant additions, according to Gill, and YES Bank
plans to focus more on cash-flow-based underwriting going forward to ensure timely repayment. The lender also wants to grow retail lending by leveraging its digital platform.
Analysts have been downgrading YES Bank’s stock on concerns over the extent of further deterioration in asset quality and lingering worries over corporate governance after the exit of several of its board members. The proportion of “sell” calls on the stock has reached the highest in nearly a decade, according to data compiled by Bloomberg.