Yes Bank says proportion of dud loans reduces in last one year

Yes, Bank Monday said the proportion of dud loans have reduced in the last one year and the asset quality outlook is "stable".

The midsize private sector lender's debt instruments have been put on 'credit watch with developing implications' by Care Ratings, it disclosed in a regulatory filing.

"Over the past few days, some unfounded speculations regarding the bank's asset quality have been brought to its notice. In this context, management clarifies that the asset quality continues to be stable," a bank statement said.

The bank also said that the liquidity position is "comfortable" with a liquidity coverage ratio of 101 percent as on September 30, 2018.

The lender's scrip had been witnessing a heavy sell-off, eroding 40 percent of its value since the Reserve Bank curtailed down the term of its co-promoter, managing director and chief executive, Rana Kapoor, till January 2019, for unspecified reasons.

Yes, Bank was found to have underreported its non-performing assets (NPAs) by over Rs 10,000 crore for two consecutive years by the RBI.

The bank revealed that the proportion of gross NPAs has declined to 1.35 percent as on September 30, 2018, from 1.82 percent the year ago. In the numbers released before the announcement of the quarterly results, it said loans have grown 61.5 percent to Rs 2.40 lakh crore as on September 30, and this includes domestic advances of Rs 2.20 lakh crore. Deposits have grown 41 percent to Rs 2.23 lakh crore, with the share of the low-cost current and savings deposits at 33.8 percent, it said.

The bank said the data is subject to approval by the audit committee of the board, the board of directors and review by its statutory auditors. Meanwhile, the lender said it will finalize the two external members on a panel to search Kapoor's successor by October 7.

The newly-formed search and selection committee will be assisted by a global leadership advisory firm and evaluate both internal and external candidates, it said, adding that RBI timelines will be adhered to.

On September 25, the board decided to seek an extension of up to eight months beyond the trimmed down period of January 31, 2019, for Kapoor to stay on so that the bank could find a successor and meet other regulatory demands of closing the financial accounts for the year.

It also established the search and selection committee comprising three members from the existing nomination and remuneration committee along with two external experts to identify Kapoor's successor.

To ensure a long-term succession plan, the board elevated senior group presidents Rajat Monga, who handles financial management, and Pralay Mondal, who heads the focus area of retail, as executive directors.

The bank statement Monday said it has submitted its application to the RBI for approving the elevation for the two officials. In a message to employees, its non-executive chairman Ashok Chawla said the bank is "transiting through a process of change", but stressed that its fundamentals are "rock solid".

"The management continues to take all necessary measures for the change management to progress seamlessly," he said.

The bank's stocks were trading 5.07 percent up from the previous close at Rs 192.75 a piece on the BSE at 1413 hrs.