Mumbai: Yes BankNSE 2.78 % CEO Ravneet Gill refuted market speculation about the capital and liquidity position of the bank calling such talk “speculative, unsubstantiated and irresponsible”.
In a statement on Monday, Gill reiterated the bank’s Q1asset quality guidance and said that it has reduced its exposure to a real estate and housing finance conglomerate which has been in the news on Monday.
“Recent market rumours and reports appear to have generated a lot of speculation around Yes Bank Limited. We strongly refute them as being speculative, unsubstantiated, and irresponsible. While this has impacted the share price adversely, the bank would like to state that its capital and liquidity position are comfortably above the regulatory threshold and the asset quality is in line with the guidance provided post Q1 FY20 results,” Gill said.
In a notice to stock exchanges earlier in the day, Yes Bank said that it has received permission from the Reserve Bank of India to go ahead with the proposed increase in its authorised share capital. The bank will now seek necessary shareholders’ consent and to raise capital.
Yes Bank had guided for a provision cost of 125 basis points of the bank’s total loan book for the fiscal ended March 2020. One basis point is 0.01percentage point. The bank’s gross NPAs had increased to Rs 12,092.10 crore or 5.01 per cent of loans as on June 30, 2019, compared with 1.31 per cent a year ago.
Yes Bank’s share slipped 15 per cent on Monday to close at a 10-year low amidst market talk about the bank’s exposure to an real estate and housing finance conglomerate. It closed at Rs 41.45 even as the benchmark Sensex lost 0.40 per cent.
Gill said the bank has been successful in reducing exposure to the said stressed company over the last six months. “The bank’s outstanding exposure to the housing finance/real estate conglomerate, which is in the news today, is totally secured and over the last six months there has been a reduction of approximately 30 per cent in this exposure. The account is standard and current,” he said.
The bank has also seen an increase 39 per cent in the number of new fixed deposit accounts, over the previous quarter.