After Axis Bank, comes Yes Bank woes…(The hype that only Public Sector Banks are villains is so wrong…)

Amidst Nationalised Banks recapitalisation, the so called efficient and well run private banks show they are no different. This reminds me of a conversation I had with friends a year back that how all this image of private banks is just a mirage. They said in public sector banks one knows the true picture  but private sector banks just hide most stuff amidst the glamour. I was told wait & watch and be prepared to be shocked!

Indeed that is happening.

Andy Mukherjee after ripping Axis Bank, writes another one on Yes Bank:

Oh no, Yes Bank. You don’t get to spin a yarn about the wonderful quarter you’ve had.

You don’t get to fill page after page of your earnings presentation with arrows pointing up, up and up. The bragging about how you are the world’s second-most-social brand (whatever that means) can also wait.

There’s only one question for you to answer. Actually, make that two.

First, how does Yes Bank Ltd. even begin to justify that the regulator, the Reserve Bank of India, found nonperforming assets to have been four times as large on March 31 than was then acknowledged in audited results?

 Second, how did the management credit committee, packed with such stalwarts as the managing director, the chief risk officer, the risk heads, business heads and product heads (and tasked to review among other things stressed accounts) allow an extra $1 billion of them to masquerade as standard assets? The last full year of profit was inflated as much as 44 percent by that means.
….
Where Yes deserves full marks is for confidence. Managing Director Rana Kapoor is willing to let the provision coverage ratio at Yes drop to 43 percent, from 60 percent a quarter ago. Evidently, he’s expecting recoveries.
🙂
Governance or lack of it has become such an important issue…
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