YES Bank ‘will be re-rated by next quarter’, says CEO

YES Bank’s new Managing Director and CEO Ravneet Gill believes that many of the issues at the troubled private sector lender will be addressed by next quarter and that it would also finalise its capital-raising plans by then.

“When we talk about issues, some of them are perception-based, which are easier to sort out. We are also actively managing a couple of concentrated exposures. So my sense is that in a quarter’s time, the entire organisation would have got re-rated,” he told BusinessLine , adding that while rating agencies take a little more time to review ratings, concerns over the bank would have been suitably allayed. Gill, who took over as MD and CEO of YES Bank on March 1 this year, also expressed confidence over the bank’s financial health, and said that the fourth quarter loss should not be seen as the business model being “broken”.

“From this quarter on, it was business as usual. I can’t make any forward-looking statements as we are a listed company, but we didn’t see anything fundamentally broken. When people reflect on our performance in the fourth quarter, it has to be seen with that perspective in mind. It was a reset phase, but it was not as if the business model had a fundamental issue,” he stressed.

YES Bank had posted a net loss of ₹1,507 crore in the fourth quarter of the fiscal. Since then, analysts have been concerned about the large exposure to troubled sectors, such as NBFCs and real estate. Global rating agency Moody’s has also placed the bank’s ratings under review for a downgrade.

However, Gill remains upbeat, and said the lender has already made pre-emptive provisioning for accounts where there was weakness and chances of defaults in the future. He also expects resolution of some of the NBFC clients, while in real estate, accounts which could potentially become stressed in the future, have been ring-fenced.

“We are comfortable with our real estate and NBFC exposure. I feel that by end of the second quarter we should be able to see the resolution of these accounts,” he said.

Allaying concerns over the bank’s share price, which ended at ₹103.25 apiece on the BSE on Wednesday, he pointed out that banking is a long-term game.

“You can’t judge banks just on the basis of their share price on a short-term basis. If on a long-term basis the share price remains depressed, it is obviously an indicator of many things. But if there is some volatility in share price in the short term, people must understand that banking is a long-term game, and you cannot judge it every fortnight or quarter,” he said, adding that he expects it to stabilise once YES Bank is able to raise capital.

The lender plans to raise $1.2 billion capital though either a public market transaction or from private equity players. Terming it as growth capital, Gill said it would be raised in the second quarter.

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