MOSL: YES BANK (Buy)-Reality sinking in-bracing the uncertainty
yES bANK: Reality sinking in; bracing the uncertainty
(YES IN, Mkt Cap USD6.4b, CMP INR201, TP INR350, 74% Upside, Buy)
In continuation to our report dated 21st Sep’18 titled “RBI drives yet another management charge; overhang deepens - link”, Yes Bank hosted a conference call to discuss the recent developments and progress the bank is making to deal with the current situation. The stock has corrected by 38% since the RBI notification which allowed Mr. Rana Kapoor to continue as MD & CEO until Jan-19. Though the bank has applied for an extension of Mr. Rana Kapoor for three months until Apr’19 (further extension of six months requested for until Sep’19), the process of succession planning is already underway by the bank. Yes has established a “Search and Selection Committee” comprising of three existing Nomination & Remuneration Committee Board Members plus two external experts which will be finalized over next one week. Though the management has not yet seen any adverse impact on the overall business they however have been monitoring situation closely and have guided for stable asset quality, credit cost trend. Following are the key takeaways from the concall:
Succession planning is underway: Yes bank will be able to finalize the two external experts for the “Search and Selection Committee” by end of this week. A Global Leadership Advisory firm will be appointed by next week which along with the “Search and Selection committee” will evaluate both internal and external candidates for successor. The bank aims to shortlist three names by month end, which will then be submitted to RBI for its approval by end of November or first week of December. Though the bank has applied for an extension of Mr. Rana Kapoor, the board is working with Jan-19 as the deadline and believes that any extension provided will be helpful for comfortable handover. Further, keeping long term succession plan in mind, two senior leaders of the bank – Mr. Rajat Monga and Mr. Pralay Mondal will be appointed as Executive Directors of the bank subject to the approval of RBI.
YES BANK Limited is a private sector bank. The Bank is engaged in providing banking services, including corporate and institutional banking, financial markets, investment banking, corporate finance, branch banking, business and transaction banking, and wealth management. The Company's segments include Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations. Its Treasury segment includes investments and financial markets activities undertaken on behalf of the Bank's customers, trading, maintenance of reserve requirements and resource mobilization. The Corporate/Wholesale Banking includes lending, deposit taking and other services offered to corporate customers. The Retail Banking includes lending, deposit taking and other services offered to retail customers. The Other Banking Operations segment includes para banking activities, such as third party product distribution and merchant banking, among others.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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