Yes Bank has been in the limelight for all the wrong reasons in recent times – board resignations, asset quality, decreasing capital buffers, declining share prices, and many more. However, the Management of the Bank feels optimistic and confident to steer through these testing times on the back of strong fundamentals of the Bank. In an interview with leasing news channel ET Now recently, the Bank’s MD & CEO Mr. Ravneet Gill allayed all the concerns surrounding the bank, with a delightful pride on the trust and confidence portrayed by the investors and other stakeholders in the Management.
Gill took over the control of the affairs at Yes Bank in March this year. While the times have been tough for the bank since then, the optimism shown by him across the interview should certainly be a nerve-soother for the investors. As they talked about the recent Board changes, Mr. Gill termed the appointment of ex-deputy governor of RBI, Mr. R Gandhi as an additional director on YES Bank’s board as an extremely positive development. He further shared, “the last board meeting, held on the sidelines of the AGM was attended in-person by Mr. Gandhi and the Board felt enriched with his sectoral experience. The timing of resignations of the other two board members is purely coincidental, and not related to bank fundamentals per se.”
In terms of Capital Raising plans, he shared that the Bank has been in touch with multiple Private Equity (PE) investors, and the bank should be able to raise some capital soon. While the current valuation may be lower than the historical averages, but the bank would focus on the priorities, and that is the revival of the growth story for the bank. Even when the markets have been considering the tight liquidity in the financial sector as a big negative, Mr. Gill seemed confident in respect of the investor interest for making the capital raising plans a success as he also shared the shareholders’ suggestions for a rights issue during the Annual General Meeting (AGM), instead of approaching the PE investors. “It was gratifying to see how much goodwill the bank enjoys among its shareholders,” he said.
As the talks turned towards the credit cost guidance, he expressed complete confidence in the guidance shared by the Bank during the declaration of annual financial results. While the Credit Rating Agencies have also placed the bank on rating review on concerns of asset quality slippages and other concerns, CEO reiterated its stance of earlier credit cost guidance of 125 bps (basis points) or in simpler terms, 1.25% and in fact shared that several positive developments have taken place in the interim. Amidst the talks of large exposures in the defaulting companies, he further shared that the current guidance has factored in all the negative concerns and things can only take a positive turn around here.
The bank has been under a phase of strong growth for the past five years, and the current period seems to be a phase of consolidation and preservation of investor confidence. With the changing contours in the economy re-defining the macros for the financial sector, the Bank is moving across a phase of transition. Mr. Gill seemed optimistic about the future outlook for the bank as he shared, “Q2 would help us reignite our journey towards growth, with some capital expected to be raised by that time. Going forward, the asset quality concerns are also expected to soften with the overall improvement in the structural challenges the economy is currently facing, more specifically, the financial sector. The risk management at the bank, the foundation for the bank’s business model, has historically been its key differentiator in the market, and while we may be facing some headwinds presently, the business model has been intact.”
With Mr. Gill laying the foundation of a strong commitment towards the bank’s future outlook with his philosophy of ‘Grow, Learn, Evolve,’ it seems like the time is ripe to ‘Say YES for Growth.’