CARE Ratings placed the various debt instruments of YES Bank
on “credit watch” with developing implications on Saturday. “Kapoor has been instrumental for the bank’s growth since its inception, and the selection of his successor would be critical for the future prospects of the bank,” maintained the ratings agency.
Last week, the bank announced plans to seek permission from the Reserve Bank of India (RBI) for an extension of Kapoor’s term as Managing Director (MD) and Chief Executive Officer (CEO), which led to the bank being accused of not having a proper succession plan in place. The bank had set up a ‘‘Search and Selection Committee” in accordance with the RBI’s letter, which instructed the former to search for Kapoor’s successor. The bank on Monday said names of the two external experts would be finalised by October 7. YES Bank
had appointed two senior leaders Rajat Monga and Pralay Mondal as executive directors, pending RBI
approval for long-term succession planning.
Monga said appointing executive directors was needed to keep “the second line of management” ready and “balance the board”.
The committee comprises three existing board members of Nomination & Remuneration Committee — Brahm Dutt, Chairman and Independent Director, Mukesh Sabharwal, Independent Director and Subhash Kalia, Non-executive Non-independent Director in addition to the two external experts.
The bank also announced its un-audited financial position as on September 30, 2018, ahead of Q2 results. The bank’s deposits grew 41 per cent over last year September quarter aggregating Rs 2.23 trillion as on September 30, 2018. Its current and saving accounts (CASA) ratio stood at 33.8 per cent in September, against 37.2 per cent in the year-ago quarter.
The bank’s loans and advances grew by 61.5 per cent over the year-ago quarter aggregating to Rs 2.40 trillion as on September 30, 2018 of which Domestic Advances aggregated to Rs 2.20 trillion (growth of 56.4 per cent YoY), said the bank in a press statement on Monday.
The bank asset quality improved at 1.35 per cent as on September 30 2018, against 1.82 per cent as on September 30, 2017.
“Over the past few days, some unfounded speculations regarding the bank’s asset quality have been brought to its notice. In this context, management clarifies that the asset quality continues to be stable and reiterates its credit cost guidance at 50-70 bps for FY19 (76 bps for FY18),” said the lender.
The Bank added that it has a Liquidity Coverage Ratio (LCR) of 101 per cent as on September 30, 2018, which is 11 per cent points in excess of the minimum regulatory requirement of 90 per cent. The bank’s average daily LCR for Q2FY19 was 100 per cent.
“The bank’s liquidity position will further benefit from the recent RBI
measures (announced on September 27, 2018) to ease systemic liquidity which will take effect on October 01, 2018,” it said.