Yes Bank

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Yes Bank Limited
TypePublic
BSE: 532648
NSE: YESBANK
ISININE528G01035
IndustryBanking, Financial services[1]
Founded2004; 17 years ago (2004)
FounderRana Kapoor
Ashok Kapur[2]
HeadquartersMumbai, Maharashtra, India
Key people
Products
RevenueIncrease ₹10,769 crore (US$1.5 billion) (2021)
Increase ₹4,977 crore (US$700 million)[3] (2021)
Increase ₹−3,462 crore (US$−490 million)[3] (2021)
Total assetsIncrease ₹273,543 crore (US$38 billion) (2021)
Total equityDecrease ₹19,184.87 crore (US$2.7 billion)[4] (2020)
OwnerState Bank of India (30%)[5]
Number of employees
18,238 (2018)[6]
Capital ratio17.0% [6]
Websitewww.yesbank.in

Yes Bank Limited is an Indian private sector bank headquartered in Mumbai, India[7] and was founded by Rana Kapoor and Ashok Kapur in 2004.[8] It offers wide range of banking and financial products for corporate and retail customers through retail banking and asset management services.[9] On 5 March 2020 in an attempt to avoid the collapse of the bank, which had an excessive amount of bad loans, the Reserve Bank of India (RBI) took control of it. RBI later reconstructed the board and named Prashant Kumar, former Chief financial officer of SBI, as new MD & CEO at Yes Bank.[10] Yes Bank is owned by State Bank of India who has a 30% stake in the company as of 28 July 2020.[5][needs update]

Business

Yes Bank has interests in syndicated loans and corporate banking. It has three subsidiaries – Yes Bank, Yes Capital and Yes Asset Management Services.[11]

As of September 2018, Yes Bank had taken syndicated loans from eight large international entities including ADB, OPIC, European investment bank, banks in Taiwan and Japan for amounts ranging from US$30 million to US$410 million, which it in turn lend to small and medium scale enterprises as well as large corporates. It has also both taken as well as given short term loans to a number of retail and corporate banks in Taiwan, Japan, the United States, and Europe.[12][13] It has partnered with the US government based OPIC and with Wells Fargo to support women entrepreneurs.[14]

Yes Bank provides Unified Payments Interface (UPI) services for a number of major companies, such as Airtel, Cleartrip, RedBus, and PhonePe among others. In January 2020, it was responsible for handling 514 million UPI transactions out of the 1.31 billion made that month.[15] Yes bank has acquired over 24 percent of stake in dish TV India on 30 May 2020.[citation needed]

Listings

Yes Bank has equities listed on the Bombay Stock Exchange and the National Stock Exchange of India and has bonds listed on London stock exchange. Yes Bank was listed in the stock exchanges of India post its IPO in May 2005 at an issue price of ₹45.[16]

Shareholding pattern

As of March 2018, as per its annual shareholder's report, the three largest shareholders of Yes Bank limited were foreign portfolio investors (43%), insurance companies (14%), and mutual funds including UTI (10%).[17][18]

Smaller (less than 5%) shareholdings were owned by its three promoters [Rana Kapoor (4%), Yes Capital (India) Pvt. Ltd. (3%), and Morgan Credits Pvt. Ltd. (3%)] and other investors including Madhu Kapur (8%), Mags Finvest Pvt. Ltd. (2%), and LIC India under its various schemes (10%).[19] Yes Bank limited operates under three distinct entities – Yes Bank, Yes Capital and Yes Asset Management.[20]

On March 2020, State Bank of India invested ₹7,250 crore (US$1.0 billion) in the bank amid financial crisis and remains 49% stake capital owner of Yes Bank.[21][22]

Recent developments

In September 2016, Yes Bank scrapped its proposed $1 billion share sale due to market conditions.[23][24] The company subsequently attempted to relaunch its failed capital raising exercise after appointing a new set of bankers.[25]

In October 2017, the bank launched a digital wallet known as Yes Pay, integrating with BHIM and UPI.[26] On 3 November 2017, Yes Bank signed a MoU with the government to provide ₹1,000 crore (equivalent to ₹11 billion or US$160 million in 2019) financing for food processing projects.[27]

2020 moratorium

On 5 March 2020, the Reserve Bank of India (RBI) announced that, in the interest of its customers and depositors, it would suspend and supersede Yes Bank's board and impose a 30-day moratorium on its operations. The RBI cited Yes Bank's failures to raise new funding to cover its non-performing assets, inaccurate statements of confidence in its ability to receive new funding, and its underreporting of its non-performing assets, among other factors, as the impetus for this moratorium. Customers are being limited from withdrawing more than ₹50,000 (US$700) from their accounts, except in certain exceptional circumstances (such as to cover medical care, emergencies, higher education, and "obligatory expenses" for ceremonies such as weddings). RBI governor Shaktikanta Das stated that the matter would be resolved "swiftly"; Finance Minister Nirmala Sitharaman announced a proposed turnaround plan, under which the State Bank of India would take a 49% stake in Yes Bank and introduce a new board.[28][29][30][31]

On 6 March 2020, ICRA downgraded the rating of Yes Bank's ₹52,600 crore (US$7.4 billion) in core bonds to a "D" rating, while Moody's downgraded them to "Caa3".[32][33] On 8 March 2020, Yes Bank founder Rana Kapoor was arrested by the Enforcement Directorate under charges of money laundering.[34]

The moratorium caused major disruptions to e-commerce in India, due to a number of prominent services and online stores having used Yes Bank as its payment provider for UPI. Some services using Yes Bank in tandem with other payment providers have seen fewer disruptions.[35]

On 13 March 2020, the Union Cabinet approved the reconstruction scheme for Yes Bank and that within three days of the notification of the scheme the moratorium would be lifted.[36] During this reconstruction, seven investors infused ₹12,000 crore (US$1.7 billion) in Yes bank and Prashant Kumar was proposed as new CEO of the bank. These investors include State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Rakesh Jhunjhunwala, Radhakishan Damani and Azim Premji trust.[37]

In April 2021, Yes Bank was fined ₹25 crore (US$3.5 million) for fraudulently selling risky bonds without the necessary warnings and risk assessments.[38]

See also

References

  1. ^ Annual Report 2017–18. Mumbai: Yes Bank Limited. Retrieved 14 October 2018.
  2. ^ "Late Ashok Kapur". 28 November 2008.
  3. ^ a b "Yes Bank Ltd. Financial Statements". moneycontrol.com.
  4. ^ "Yes Bank Balance Sheet, Yes Bank Financial Statement & Accounts". www.moneycontrol.com.
  5. ^ a b "SBI stake in YES Bank declines to 30% after FPO". The Economic Times. Retrieved 28 July 2020.
  6. ^ a b "Balance Sheet 31.03.2018" yesbank.in (17 March 2018).
  7. ^ "Press Release – Yes Bank".
  8. ^ "Stocks in India by Net Sales, List of Top Banks – Private Sector Stocks in India (2017) – BSE". Moneycontrol.com. Retrieved 13 April 2018.
  9. ^ "Yes Bank board to meet Tuesday after RBI directive on Rana Kapoor's tenure". Live Mint. PTI. 24 September 2018. Retrieved 29 September 2018.
  10. ^ "Yes Bank board reconstituted with appointment of 8 members". Yahoo! News. 26 March 2020. Retrieved 26 March 2020.
  11. ^ "Investors conference call transcript". Official transcript. Yes bank. Retrieved 29 September 2018.
  12. ^ "OPIC Signs Loan Agreement with Yes Bank to Support Small Business Growth in India". Press release. OPIC. Retrieved 29 September 2018.
  13. ^ "Investor presentaiton 2018–19". www.yesbank.in. Yes Bank. Retrieved 29 September 2018.
  14. ^ "Yes Bank partners with OPIC and Wells Fargo to Support Financing of Women Entrepreneurs and SMEs". OPIC press release. OPIC. Retrieved 29 September 2018.
  15. ^ "Yes Bank's turmoil leads to chaos in digital payments world". The New Indian Express. Retrieved 6 March 2020.
  16. ^ "YES Bank IPO: Offer & Issue Details - The Economic Times". Economictimes.indiatimes.com. Retrieved 14 October 2017.
  17. ^ Laghate, Gaurav; Shukla, Saloni (1 June 2020). "Yes Bank may find it tough to recover Dish promoter dues". The Economic Times.
  18. ^ "Investor presentation 2018". Yes Bank official website. Yes Bank. Retrieved 29 September 2018.
  19. ^ "Share holding pattern as on 30 June 2018". official website. Yes Bank. Retrieved 29 September 2018.
  20. ^ Annual shareholder report 2017-18. Mumbai: Yes Bank. Retrieved 29 September 2018.
  21. ^ Rebello, Joel (2 June 2020). "YES Bank takes first step to share sale". The Economic Times.
  22. ^ "SBI to buy YES Bank shares worth Rs 7,250 crore at Rs 10 apiece". The Economic Times. 12 March 2020. Retrieved 12 March 2020.
  23. ^ "Yes Bank says no to share sale after scrip tanks". The Economic Times. 9 September 2016. Retrieved 14 October 2017.
  24. ^ "Yes Bank's opportunism is to blame for failed share sale". The Economic Times. 10 September 2016. Retrieved 14 October 2017.
  25. ^ Anand, Samie Modak & Nupur (20 October 2016). "Yes Bank may appoint new i-banks for QIP". Business Standard. Retrieved 14 October 2017.
  26. ^ "Yes Bank Bhim Yes Pay wallet unveiled; IndiaStack APIs and NPCI products now integrated, see how you benefit". The Financial Express. 30 October 2017. Retrieved 11 April 2018.
  27. ^ "Yes Bank signs MoU with govt for Rs 1,000 cr financing". The Economic Times. 3 November 2017. Retrieved 11 April 2018.
  28. ^ "Yes Bank crisis: From what happens to my money to will SBI be saviour, all that has happened". India Today. Retrieved 6 March 2020.
  29. ^ "Here is all you need to know about the Yes Bank moratorium". The New Indian Express. Retrieved 6 March 2020.
  30. ^ "Yes Bank withdrawal limit capped at Rs 50,000; RBI supersedes board". The Economic Times. 6 March 2020. Retrieved 6 March 2020.
  31. ^ "Yes Bank withdrawals capped at Rs 50,000. Do these exceptions apply to you?". India Today. Retrieved 6 March 2020.
  32. ^ "Moody's lowers YES Bank rating to 'Caa3' from 'B2'". The Economic Times. 6 March 2020. Archived from the original on 12 April 2021. Retrieved 12 April 2021.
  33. ^ "Icra downgrades YES Bank's Rs 52,600 crore bonds to 'default'". The Economic Times. 6 March 2021. Archived from the original on 13 January 2021. Retrieved 12 April 2021.
  34. ^ "Yes Bank founder Rana Kapoor arrested by ED in money laundering case". Zee News. 8 March 2020. Retrieved 8 March 2020.
  35. ^ "India's Yes Bank breakdown disrupts Walmart's PhonePe among a dozen other services". TechCrunch. Retrieved 6 March 2020.
  36. ^ "Cabinet approves reconstruction scheme for Yes Bank: FM Sitharaman". Moneycontrol. Retrieved 13 March 2020.
  37. ^ Shukla, Saloni; Rebello, Joel (13 March 2020). "Seven investors join SBI to put over Rs 12,000 cr into Yes Bank; Prashant Kumar proposed as new CEO". The Economic Times. Archived from the original on 4 March 2021. Retrieved 12 April 2021.
  38. ^ "SEBI fines Yes Bank for fraudulent sale of riskier bonds". Reuters. 12 April 2021. Archived from the original on 12 April 2021. Retrieved 12 April 2021.

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