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Yes Bank

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YES BANK
Company typePublic
BSE: 532648
NSE: YESBANK
ISININE528G01035
IndustryBanking, Financial services[1]
Founded2004; 20 years ago (2004)
FoundersRana Kapoor
Ashok Kapur
HeadquartersMumbai, Maharashtra, India
Key people
Products
RevenueIncrease ₹329.61 billion (US$3.9 billion) (2024) [2]
Increase ₹33.86 billion (US$410 million)[2] (2024)
Increase ₹12.51 billion (US$150 million)[2] (2024)
Total assetsIncrease ₹4.05493 trillion (US$49 billion) (2024)
Total equityIncrease ₹421.4539 billion (US$5.0 billion)[3] (2024)
Number of employees
28,001 (2024)
Capital ratio18% [4]
Websitewww.yesbank.in

Yes Bank (stylised as YES BANK) is an Indian private sector bank, headquartered in Mumbai, catering to retail customers, MSMEs, and corporate clients. The bank was founded by Rana Kapoor and Ashok Kapur in 2003.[5] Its network is spread across 300 districts in India and comprises 1,198 branches, 193 BCBOs and 1,287+ ATMs.[6][7]

Among the bank’s major shareholders are the State Bank of India, the country’s largest scheduled commercial bank; two global investors viz affiliate of The Carlyle Group and Advent International, among others.[8]

History

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In 1997–98, three Mumbai-based bankers–Rana Kapoor, Ashok Kapur and Harkirat Singh–co-founded Rabo India Finance in partnership with Rabobank of the Netherlands.[9] In early 2003, the three bankers started Yes Bank with proceeds from selling their stakes in Rabo India Finance.[10] Harkirat Singh resigned in April 2003 citing concerns over Rabobank's influence in appointing a leader for Yes Bank.[11][12]

In May 2004, Yes Bank obtained banking license from the Reserve Bank of India (RBI).[13] Initially, Rana Kapoor and Ashok Kapur each held 26% in the bank, Rabobank owned 20%, newly-appointed directors were allocated 3% and private equity firms held the remaining 25%.[14] The bank opened its first branch in August 2004.[11]

Yes Bank was listed on the stock exchanges of India after its IPO in June 2005 at a face value of ₹10 and an issue price of ₹35.[15][16]

In November 2008, co-founder and non-executive chairman Ashok Kapur was killed at the Trident Hotel during the 26/11 terrorist attacks in Mumbai.[17]

In September 2016, Yes Bank scrapped its proposed $1 billion share sale due to market conditions.[18][19] The company subsequently attempted to relaunch its failed capital raising exercise after appointing a new set of bankers.[20][21]

By early 2020, the financial position of Yes Bank had deteriorated as it had been unable to raise capital. This had resulted in potential loan losses, which in turn led to downgrades and prompted investors to invoke bond covenants, and a withdrawal of deposits by customers.[22][23]

On 5 March 2020, the RBI took over Yes Bank in a bailout provision. RBI reconstructed Yes Bank's board, naming Prashant Kumar, former chief financial officer and deputy managing director of State Bank of India, as its MD & CEO, along with Sunil Mehta, former non-executive chairman of Punjab National Bank, as the non-executive chairman.[24][25][26][27] Under the RBI's mandate, State Bank of India, HDFC Bank, ICICI Bank, Axis Bank and other financial institutions infused funds to help Yes Bank through a reconstruction scheme.[28][29]

In July 2020, Yes Bank completed its follow-on public offer (FPO).[30]

In April 2021, India's market regulator Securities and Exchange Board of India (SEBI) proposed a fine of ₹25 crore (US$3.38 million) on Yes Bank, stating that it had fraudulently sold certain risky bonds without the necessary warnings and risk assessments.[31][32] In May 2021, the Securities Appellate Tribunal (SAT) imposed an interim stay on SEBI's order.[33]

On 21 February 2023, it issued 2,13,650 equity shares to its employees under the company ESOP plan.[34][35]

Corporate affairs

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The State Bank of India (SBI), the largest scheduled commercial bank in India, is the largest shareholder in Yes Bank, holding 23.99% of the shares.[36] Yes Bank has also received investments from international private equity firms, namely Advent International and The Carlyle Group.[37][38]

Largest shareholders
Shareholder Percentage
State Bank of India 23.99%
Verventa Holdings (Advent) 9.2%
CA Basque Investments (Carlyle) 6.84%
Life Insurance Corporation of India 3.96%
HDFC Bank 2.75%
ICICI Bank 2.39%
Kotak Mahindra Bank 1.21%
Axis Bank 1.01%

Operations

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Yes Bank operates in retail, MSME and Corporate banking sectors from 1,192 branches and 1,301 ATMs and cash recyclers in over 700 cities. It serves corporate and retail customers through retail banking and asset management services.[39]

In October 2017, the bank launched a digital wallet known as Yes Pay, integrating with BHIM and UPI.[40] On 3 November 2017, Yes Bank signed a MoU with the government to provide ₹1,000 crore (equivalent to ₹14 billion or US$170 million in 2023) financing for food processing projects.[41]

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.[42][43]

Yes Bank acquired a 24.19% stake in the direct-to-home (DTH) company, Dish TV, on 30 May 2020.[44]

In March 2024, Yes Bank became the official banking partner for the Indian contingent at the 2024 Summer Olympics in Paris.[45]

In May 2024, Yes Bank partnered with Ebanx, a fintech company focused on cross-border e-commerce payments, to enable payments from India.[46]

Subsidiaries

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YES Securities

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YES Securities (India) Limited (YSIL), which was founded in 2013, is a fully owned subsidiary of YES Bank. It provides personalized financial services to Retail, HNI/UHNI, and Institutional clients, such as wealth broking, institutional equity sales and trading research.[47][48]

2020 bailout

[edit]

Moratorium

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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.[49] 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 reasons for the moratorium.[50]

On 6 March 2020, ICRA downgraded the rating of Yes Bank's ₹52,600 crore (US$7.1 billion) in core bonds to a "D" rating, while Moody's downgraded them to "Caa3".[51][52][53]

During the moratorium period, Yes Bank customers could withdraw only up to ₹50,000 (US$674.77) from their accounts for the following one month, except in certain situations like medical treatment, emergencies, higher education costs and obligatory expenses for ceremonies such as weddings (subject to RBI's approval).[54] The moratorium disrupted multiple e-commerce services whose users were struggling to make online transactions or use payment services like UPI.[55][56][57]

RBI governor Shaktikanta Das stated that the matter would be resolved swiftly; Ministry of Finance under 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.[58][50][54][59] On 13 March 2020, the Union Cabinet approved the reconstruction scheme for Yes Bank, stating that within three days of the notification of the scheme, the moratorium would be lifted.[60] During this reconstruction, seven investors infused ₹12,000 crore (US$1.62 billion) in Yes Bank, and Prashant Kumar was proposed as it new CEO. These investors included State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank, Rakesh Jhunjhunwala, Radhakishan Damani and Azim Premji Trust.[61]

The bank came out of the moratorium and resumed full-fledged banking operations on 18 March 2020.[62][63]

Reconstruction

[edit]

Under the new management, Yes Bank's liquidity profile improved with a rise in deposits.[64] The bank generated ₹150 billion (US$2.02 billion) via follow-on public offer in July 2020.[65]

ICRA raised its ratings on securities issued by Yes Bank Ltd in September 2020.[66] Low-level Basel II bonds and infrastructure bonds were raised to "BBB" from "BB+." Tier II bonds that are in line with Basel III were raised from "BB" to "BBB-." Tier I and higher tier II bonds that were compliant with Basel II were raised from a default rating to a "BB" rating.[67]

Moody's changed Yes Bank's long term issuer rating from Caa1 to B3 in August 2020.[68] In November 2020, CARE Ratings revised its rating on the YES Bank's infrastructure bonds to 'CARE BBB' from the previous 'CARE B'.[69] It also revised its outlook to 'Stable' from the previous ‘Under credit watch with developing implications’ on the above-mentioned instruments. Yes Bank's Upper Tier II Bonds and Perpetual Bonds (Basel II) received a revised rating of 'CARE BB+' from previous 'CARE D'.[70]

In June 2021, the board approved ₹100 billion (US$1.35 billion) of fundraising by issuance of debt securities.[71]

See also

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Further reading

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  • Moharkan, Furquan (2021). The Banker Who Crushed His Diamonds: The Yes Bank Story. Penguin Random House. ISBN 9788195084395.

References

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  1. ^ Annual Report 2017–18. Mumbai: Yes Bank Limited. Retrieved 14 October 2018.
  2. ^ a b c "Yes Bank Ltd. Financial Statements" (PDF). bseindia.com.
  3. ^ "Yes Bank Balance Sheet, Yes Bank Financial Statement & Accounts" (PDF). www.bseindia.com.
  4. ^ "Balance Sheet 31.03.2018" yesbank.in (17 March 2018).
  5. ^ "The backbone of India's economy: How YES BANK Supports MSMEs - CNBC TV18". CNBCTV18. 9 August 2024.
  6. ^ "Yes Bank Report" (PDF). BSE India.
  7. ^ Mehta, Riju (18 May 2024). "YES Bank launches YES Grandeur for elite customers". The Economic Times.
  8. ^ "Will SBI offload its entire 26.14% stake in Yes Bank after RBI's lock-in period ends? - Details". Times Now. 6 March 2023.
  9. ^ Saha, Manojit (8 March 2020). "Rana Kapoor: The rise and quick downfall of a maverick banker". The Hindu. Retrieved 5 December 2024.
  10. ^ Karnik, Madhura (24 January 2017). "How Yes Bank's Rana Kapoor went from being an intern at Citibank to India's newest billionaire". Scroll.in. Quartz. Retrieved 5 December 2024.
  11. ^ a b Dutta, Prabhas (9 March 2020). "Rapid rise and free fall of Yes Bank in 10 years after co-founder died in 26/11 attack". India Today. Retrieved 31 January 2023.
  12. ^ Bhoir, Anita (26 June 2013). "History repeating itself at Yes Bank, says Harkirat Singh". The Economic Times. Retrieved 5 December 2024.
  13. ^ Alexander, George Smith (14 December 2006). "YES Bank in a spot as top brass says 'No'". The Economic Times. Retrieved 5 December 2024.
  14. ^ Smith Alexander, George. "Rana Kapoor to exit Rabo, take up Yes Bank reins". Rediff. Retrieved 5 December 2024.
  15. ^ "YES Bank IPO: Offer & Issue Details". The Economic Times. Retrieved 14 October 2017.
  16. ^ "YES Bank IPO Review - YES Bank IPO Dates, Issue Price, Subscription and Allotment Status". The Economic Times. Retrieved 6 November 2021.
  17. ^ "Yes Bank Chairman Ashok Kapur killed". Business Standard. 29 November 2008. Retrieved 5 December 2024.
  18. ^ "Yes Bank says no to share sale after scrip tanks". The Economic Times. 9 September 2016. Retrieved 14 October 2017.
  19. ^ "Yes Bank's opportunism is to blame for failed share sale". The Economic Times. 10 September 2016. Retrieved 14 October 2017.
  20. ^ Modak, Samie; Anand, Nupur (20 October 2016). "Yes Bank may appoint new i-banks for QIP". Business Standard. Retrieved 14 October 2017.
  21. ^ Ramchandani, Kumar; Jethwani, Kinjal (1 January 2021). "Yes bank: an untold story". Emerald Emerging Markets Case Studies. 11 (1): 1–37. doi:10.1108/EEMCS-04-2020-0123. ISSN 2045-0621. S2CID 235545683.
  22. ^ Adhikari, Anand (5 March 2020). "Why did Yes Bank collapse? Here are 6 main reasons". Business Today. Retrieved 31 January 2023.
  23. ^ "Yes Bank Chairman Sunil Mehta assures speedy recovery, thanks RBI, SBI, HDFC Bank, ICICI Bank for lending support". Zee Business. 11 September 2020. Retrieved 6 November 2021.
  24. ^ "SBI stake in YES Bank declines to 30% after FPO". The Economic Times. Retrieved 2 July 2021.
  25. ^ "Fund Infusion Makes YES BANK SBI's new associate bank". Live Mint. Retrieved 16 March 2020.
  26. ^ "Who is Prashant Kumar, the person in-charge of Yes Bank from today". The Financial Express. 6 March 2020. Retrieved 6 November 2021.
  27. ^ PTI (6 March 2020). "Former SBI CFO Prashant Kumar Takes Charge As Yes Bank Administrator". BloombergQuint. Retrieved 6 November 2021.
  28. ^ "Union Cabinet approves Yes Bank reconstruction plan". The Economic Times. Retrieved 6 November 2021.
  29. ^ "Yes Bank working on risk, governance after bailout: New CEO". mint. 18 August 2020. Retrieved 6 November 2021.
  30. ^ Dhanjal, Swaraj Singh; Ramarathinam, Ashwin (17 July 2020). "Yes Bank manages to close its FPO with 95% subscription". mint. Retrieved 6 November 2021.
  31. ^ "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.
  32. ^ "SEBI fines Yes Bank for fraudulent sale of riskier bonds". Reuters. 12 April 2021. Retrieved 15 November 2021.
  33. ^ Kaul, Abhinav (24 May 2021). "SAT stays Sebi penalty order in Yes Bank case". mint. Retrieved 2 July 2021.
  34. ^ Market, Capital (21 February 2023). "Yes Bank allots 2.13 lakh equity shares under ESOP". Business Standard India. Retrieved 23 February 2023.
  35. ^ "Yes Bank is sufficiently capitalised for FY25: Prashant Kumar, MD and CEO". Businessline. 6 March 2024. Archived from the original on 12 March 2024. Retrieved 13 March 2024.
  36. ^ Kumar, Shivendra (8 February 2024). "SBI jumps over 6% on YES Bank block deal buzz. Is PSU booking profit after recent surge?". The Economic Times.
  37. ^ "Carlyle, Advent pick up 9.99% stake in Yes Bank, to pump in about ₹8,896 crore". BusinessLine. 14 December 2022.
  38. ^ "Yes Bank clarifies rumors on asset quality concerns". Yale University.
  39. ^ "Yes Bank board to meet Tuesday after RBI directive on Rana Kapoor's tenure". Live Mint. PTI. 24 September 2018. Retrieved 29 September 2018.
  40. ^ "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.
  41. ^ "Yes Bank signs MoU with govt for Rs 1,000 cr financing". The Economic Times. 3 November 2017. Retrieved 11 April 2018.
  42. ^ "OPIC Signs Loan Agreement with Yes Bank to Support Small Business Growth in India" (Press release). OPIC. Retrieved 29 September 2018.
  43. ^ "Investor presentation 2018–19". Yes Bank. Retrieved 29 September 2018.
  44. ^ Laghate, Gaurav. "YES Bank acquires 24% in Dish TV by invoking share pledges". The Economic Times. Retrieved 13 November 2021.
  45. ^ "Yes Bank partners Ebanx to facilitate cross-border e-commerce for customers". The Times of India. 7 May 2024. ISSN 0971-8257. Retrieved 27 October 2024.
  46. ^ "Yes Bank partners Ebanx to facilitate cross-border e-commerce for customers". The Times of India. 7 May 2024. ISSN 0971-8257. Retrieved 27 October 2024.
  47. ^ "YES Securities (india) Limited Information - YES Securities (india) Limited Company Profile, YES Securities (india) Limited News on The Economic Times". The Economic Times.
  48. ^ "Official Website for YES Securities". YES Securities.
  49. ^ Deb, Rajat (1 June 2021). "YES Bank fiasco: a corporate governance failure". Decision. 48 (2): 181–190. doi:10.1007/s40622-021-00277-7. ISSN 2197-1722. S2CID 235507891.
  50. ^ a b "Here is all you need to know about the Yes Bank moratorium". The New Indian Express. Retrieved 6 March 2020.
  51. ^ "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.
  52. ^ "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.
  53. ^ "Yes Bank founder Rana Kapoor arrested by ED in money laundering case". Zee News. 8 March 2020. Retrieved 8 March 2020.
  54. ^ a b "Yes Bank withdrawal limit capped at Rs 50,000; RBI supersedes board". The Economic Times. 6 March 2020. Retrieved 6 March 2020.
  55. ^ "India's Yes Bank breakdown disrupts Walmart's PhonePe among a dozen other services". TechCrunch. 6 March 2020. Retrieved 15 November 2021.
  56. ^ "Here is all you need to know about the Yes Bank moratorium". The New Indian Express. Retrieved 15 November 2021.
  57. ^ "India's Yes Bank breakdown disrupts Walmart's PhonePe among a dozen other services". TechCrunch. 6 March 2020. Retrieved 6 March 2020.
  58. ^ "Yes Bank crisis: From what happens to my money to will SBI be saviour, all that has happened". India Today. Retrieved 6 March 2020.
  59. ^ "Yes Bank withdrawals capped at Rs 50,000. Do these exceptions apply to you?". India Today. Retrieved 6 March 2020.
  60. ^ "Cabinet approves reconstruction scheme for Yes Bank: FM Sitharaman". Moneycontrol. 13 March 2020. Retrieved 13 March 2020.
  61. ^ 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.
  62. ^ "We believe can recover 50% of Rs 40,000-crore bad loans: Prashant Kumar, MD and CEO, YES Bank". The Financial Express. 24 December 2020. Retrieved 15 November 2021.
  63. ^ "Yes Bank deposits increase 54% YoY in Q4". Business Standard India. 5 April 2021. Retrieved 15 November 2021.
  64. ^ "Yes Bank CEO: Yes Bank committed to culture of accountability; working on risk, governance after bailout". The Times of India. PTI. 18 August 2020. Retrieved 8 November 2021.
  65. ^ "YES Bank to disburse ₹10,000-crore retail, MSME loans in Q3". @businessline. December 2020. Retrieved 8 November 2021.
  66. ^ Nair, Vishwanath (11 September 2020). "ICRA Upgrades Yes Bank On Improved Financial Profile". BloombergQuint. Retrieved 8 November 2021.
  67. ^ Nair, Vishwanath (3 August 2020). "Moody's Upgrades Yes Bank's Rating After FPO". BloombergQuint. Retrieved 8 November 2021.
  68. ^ "Moody's upgrades Yes Bank to B3 following equity capital raising; outlook stable". Moodys.com. 3 August 2020. Retrieved 8 November 2021.
  69. ^ "Yes Bank Limited". Care Ratings. Retrieved 8 November 2021.
  70. ^ "YES Bank Shares Hit 5% Upper Circuit As CARE Upgrades Debt Instrument Rating". Moneycontrol. 10 November 2020. Retrieved 8 November 2021.
  71. ^ Gopakumar, Gopika (10 June 2021). "Yes Bank board approved fund raising of Rs10,000 cr by issue of debt securities". mint. Retrieved 8 November 2021.
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