Thread on #yesbankcrisis. I wrote this because, as usual, there were people, who are talking of growth of loans post 2014. In order to provide a perspective, developed this note and hopefully separate the chaff from Wheat.
#YesBank in 2016. Look at the low % of NPA 
As can be seen the growth on key parameters – Deposits, Advances, Net Interest Income have been very good. Probably too good and probably reflecting on the asset quality that is paying such a price. Between 2017-18 and the next fiscal is the more-than doubling of NPA as a %.
In 2018-19 (from their Annual Report) “ Concentration of NPAs Exposure (Funded + Non Funded) of the Bank to top four NPA is `32,843.86 million as at March 31, 2019 (previous year `14,510.13 million)” – Huge increase!!!
IL&FS, Dewan Housing, Jet Airways, Cox & Kings, CG Power, Cafe Coffee Day, Altico- name a bad boy of Indian financial services sector and you are likely to find YES Bank as a key lender.
What do you say of a Bank where big borrowers turn into problematic assets?
What do you say of a Bank where big borrowers turn into problematic assets?
Corporate Governance failure, credit analyst failure or a mix of all oversights? Greed - possible. But let us not discount some of the fintech ventures that Yes Bank did successfully. But that is not the point here.
A bank that started from scratch and built an asset book of over Rs 3 lakh crore in a little over a decade was signing away cheques to nearly every borrower who either went bust or turned a non-performing asset within years. businesstoday.in/sectors/banks/…
Killer was the divergence matter- YES Bank on Tuesday reported asset quality divergence of Rs 3,277 crore, based on receipt of the Reserve Bank of India’s (RBI’s) final risk assessment report for 2018-19. – Serious signs of Corporate Governance issues.
YES Bank’s MD & CEO Ravneet Gill said that unfortunate circumstances that were difficult to anticipate including crisis at Cox & Kings, CG Power, and CCD led to a rise in slippages for the private lender in Q2FY20, CNBC TV-18 reported.
These troubled firms were not victims of the ongoing economic slowdown but financial trouble brewing in these firms, he said.
financialexpress.com/industry/banki…
financialexpress.com/industry/banki…
For the three months to September in FY20, a sharp increase in bad loans, higher provisions and one-time deferred tax assets (DTA) dented YES Bank’s earnings, leading to a net loss of Rs 600 crore. While DTA adjustment was worth Rs 709 crore, provisions rose to Rs 1,336 crore .
As if this were not enough, Yes Bank’s total exposure to IL&FS and DHFL was 11.5% as of September 2019.
Rising NPA's: Apart from these, Yes Bank suffered a dramatic doubling in gross non-performing assets over the April-September 2019 to ₹17,134 crores.
Rising NPA's: Apart from these, Yes Bank suffered a dramatic doubling in gross non-performing assets over the April-September 2019 to ₹17,134 crores.
My question to those who criticize the Government is: Yes Bank was a Private enterprise. Why should Government bail it out? Is it not RBI who are supposed to continually monitor the situation and take corrective action?
There are people who are insinuating the current Government for increasing in NPAs !! To me that is preposterous. It is one thing that the Modi led Govt. (since 2014) has not done is the effective policing and follow up action on multiple finance and banking fronts.
But yet another to accuse it of supporting Yes Bank in increasing the NPAs!!! The notorious phone banking was of Congress Regime was in a different league altogether.
This is a quickly compiled thread based on publicly available threads. If anyone can fill with data on discovery of NPAs in the banking system that would be great. @c_aashish @Sanju_Verma_
@Kishoreciyer1 Would love to have your views!!
