“Yes bank is the cheapest private bank & we find great Value in it” Said Every Research Report 6 months back. Why has suddenly Yes Bank gone from being a Value Stock to a Deep Value Stock, Even Axis & ICICI Bank faced NPA Problem & probably worse than this one in 2016 but both these banks are hitting New Life Highs, Can Yes Bank do the Same?
Well let me start this blog by saying that we at Stallion Strongly believe in a 8-10x leveraged Entity like a Bank, the bet is always on the Banker. After Banks were forced to reveal their real book from 2014, Yes Bank stood out as a ‘too good to be true case’. In FY2018 SBI Bank Reported NPA’s of 19.91% on Large Corporates Book Whereas about 24.44% NPA’s on Mid corporate book. Between FY2017 & FY2018 Axis Bank Reported a 28000 Crores Increase in Gross NPA’s mostly from its 1.5 Lakh Crore Corporate book i.e. Broadly indicating 19% of its Corporate book was under Stress. The Story was Similar for ICICI bank in FY2018 with Gross NPA’s of approximately 20% on its Corporate book.
While Other Corporate Banks were suffering Yes bank increased its advances from 55 Thousand Crores in FY2014 to 2 Lakh Crores+ in FY2018 (Thats a Sixer), not only that the NPA’s of Yes Bank for FY2018 was 1.3% & you might be thinking how is that even possible, probably Yes bank didnt have exposure to corporates, well that wasn’t the case infact 70-75% of total advances (Loans given out) of Yes bank were to Large & Mid Corporate.
Now we all know what has happen after that in FY2019, RBI asked Rana Kapoor to step down & he appointed Ranveet Gill as CEO. Just Incase you didnt know this but Rana kapoor is said to be one of the smartest bankers on Mint Street who recovered all his money from defaulters like Kingfisher & Deccan chronicle. Now coming to the New CEO, Ranveet Gill, he was working in Deutsche bank where ofcourse just like any other MNC bank in India majority of revenues comes from Fees business like custody & Forex.


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