YES Bank stock closes higher after lender names Ravneet Singh Gill as next CEO
BusinessToday.In January 24, 2019
The YES Bank stock closed higher in trade today after the lender named Ravneet Singh Gill, currently heading Deutsche Bank India, as the managing director and chief executive to succeed Rana Kapoor, whose term ends on January 31.
The large cap stock closed 8.39% or 16 points higher at 213.85 compared to the previous close of 197.30 on the BSE. The stock opened higher at 198.80 level in trade today and hit an intra day high of 234.90 (up 19.06%) on the BSE.
The stock which traded flat for major part of the day rose during the last 30 minutes of trade after the bank made the announcement.
It has lost 41.38% during the last one year. The stock has been gaining for the last 2 days and has risen 11.32% in the period
The Reserve Bank had last September asked Kapoor, who is one of the promoters of the city-based lender along with his wife Bindu Kapoor, to leave the office by the end of this month.
"The bank has received Reserve Bank approval for new managing director and chief executive Ravneet Gill. He can join on or before March 1, 2019,"YES Bank said.
It further said the board will meet on January 29 to finalise the interim transition.
It can be noted that after the RBI move, the bank shares had lost more than two-thirds of its value. Even after today's rally, the stock is almost 40 percent below its 52-week high of 404 level.
Though the RBI had not cited any specific reasons while not accepting a new three-year term for Kapoor and asked him leave latest by January 31, it is attributed to under- reporting of bad loans for two years by the bank under Kapoor's watch.
Meanwhile, the lender reported a 6.96 per cent fall in net profit to Rs 1,001.85 crore in the quarter ended December 2018. Its net profit stood at Rs 1,076.87 crore in the corresponding quarter of 2017-18.
The private sector lender said net provisions stood at Rs 550.2 crore on account of Rs 570.8 crore of accelerated provisioning on exposure to a "stressed infrastructure conglomerate", according to a stock exchange filing.
The bank, however, did not name the conglomerate.
According to the filing, the bank's net interest income grew 41.2 per cent year-on-year (y-o-y) to Rs 2,666.4 crore.
Its advances grew 42.2 per cent y-o-y to Rs 2,43,885 crore.
YES Bank's gross non-performing asset (NPA) increased to 2.1 per cent of the total advances in the quarter, compared with 1.72 per cent in the year-ago period.
Net NPAs also increased to 1.18 per cent from 0.93 per cent.