“A Blessing In Disguise”
RBI Gives A Thumbs Up
Latest reports published by the RBI has cleared Yes Bank of all disparities in reporting bad loans, the report also states NIL divergence in the Bank’s Asset Classification and provisioning as per RBI norms. These developments reveal that Yes bank’s robust fundamentals have the right mix of business and balance for the near term.
A New Dawn
While investors were gripped with fear due to shaky management story and allegations surrounding former Director Rana Kapoor, a positive breakthrough came with the appointment of the new CEO Ravneet Gill. The stock has jumped almost 28% after the appointment of Ravneet Gill which underlines investor confidence in his ability to deliver an impeccable turn-around story. Ravneet Gill was heading Deutsche Bank, India prior to his appointment as Yes Bank CEO.
Strong Technical Stand-point
Massive Improvement In Financials FY17-18
Asset Quality turns Attractive FY17-18
Yes Bank has increased its cash and equivalent balances with RBI by 26.5% and with other banks by a whopping 64.4%, a measure which has been incorporated by the bank at a short notice. Total SLR and Non-SLR investments have gone up by a staggering 36.7%. These are signs that Yes Bank is restructuring the business model with improved risk management criteria. Book Value per share has risen by 15.7% while Fixed Assets have increased by 20.55%. All this has pushed up the banks Total Asset Value by an incredible 45.3%, creating additional layers of safety for share holders. The company has undergone a strong fundamental shift which is likely to absorb the impacts of uncertainty against NPA drawdowns.
What if you are holding the stock since 300.
RBI’s latest assessment of Yes Banks books have revealed no divergence in declared NPA numbers. The recent change in the company’s management also is likely to improve Yes Banks future prospects.
Since the RBI has offered a clean chit to Yes Bank and management related disputes have been settled. The central banks statement can be considered as a significant sign of hope for those who are holding the stock and looking for guidance on whether they should wait for better days in future.