1. The bank has appointed Anshu Jain from Cantor Fitzgerald to raise the fund for the banks, ETBFSI had reported. Anshu, a cousin of Ajit Jain, the vice chairman for insurance operations at Berkshire Hathaway, was the co-Chief Executive Officer of Deutsche Bank until 2015 when YES Bank’s current CEO Ravneet Gill worked as the bank’s India operations head. It has picked Cantor Fitzgerald LP, IDFC Securities Ltd. and Ambit Pvt to help it raise as much as $2 billion for bolstering capital buffers
2. YES Bank’s common equity Tier-1 capital is very low at 8.7%, against the regulatory requirement of 8%. It is at risk of falling below the regulatory requirement if it has to make any more provisions for its assets. In contrast, HDFC Bank has a common equity Tier-1 capital ratio of 15.33% and Kotak Mahindra Bank 19.53%, which are very high.
3. The lender recently decided not to proceed with the offer from Erwin Singh Braich/SPGP Holdings for a proposed investment in the bank, but the board is willing to favourably consider the offer of $500 million of Citax Holdings and Citax Investment Group in next board meeting.
4. YES has been selling stakes in companies it lent money to, including Sical Logistics, and Rosa Power Supply Company, the subsidiary of Reliance Power. It has acquired more than 10% stake in Sical Logistics and nearly 30% in Reliance Power subsidiary by the invocation of pledged shares after their default on payment.
5. YES Bank share price gained nearly 14% on Wednesday ahead of the lender’s extraordinary general meeting scheduled today. The share price was trending around Rs 38.80 in afternoon trade on Friday. Its share price has fallen over 10% in a week, 21% in a month and 79% in a year. YES Bank stock price is trading lower than its 5, 20, 50, 100 and 200-day moving averages.
6.As credibility and sentiment get eroded, time is running out for the bank to raise capital. With the bankers for fundraising in place, YES Bank needs to move quickly to avoid panic among credit investors, which could cause unwanted liquidity pressure.
7. India Ratings also recently maintained the lender’s long-term issuer rating of ‘IND A’ on Rating Watch Negative (RWN). Moody’s has kept the lender’s long-term foreign currency rating under review in January citing slowness in raising new capital by the lender.
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YES Bank EGM for nod to raise Rs 11,000 crore today; 7 points investors should consider have 590 words, post on bfsi.economictimes.indiatimes.com at February 7, 2020. This is cached page on Talk Vietnam. If you want remove this page, please contact us.