The Yes Bank management is understood to have sidestepped shareholder queries with respect to former chief Rana Kapoor’s reported bid to re-enter the bank through the board at its 15th annual general meeting here.
Shareholders emerging from the meeting said the focus was squarely on what they referred to as “the future of the bank”, especially in the backdrop of rising asset quality pressures, the looming possibility of a downgrade and erosion in the bank’s share price. “There was one question about the former CEO coming back, but the management did not respond to it,” one of the people present at the meeting told FE, adding, “Now that the RBI has made its stand clear, there is nothing more to be done about it anyway.”
Questions were also raised about what the bank plans to do to avoid being downgraded after Moody’s put it ‘under review for downgrade’ on Tuesday. Asset quality troubles, which led to the bank posting its first-ever quarterly loss in the March quarter of 2019, featured high on shareholders’ list of questions for the management. The bank is understood to have responded to these queries by stating that any future stress would emerge from a much smaller pool of assets.
“They said there are concerns only around three assets – Essel, the ADAG group and Dewan Housing Finance (DHFL). They are working on restoring those accounts and ensuring repayments,” one of the shareholders said. Another said the bank is working to ensure settlements with defaulting firms to ensure quick recoveries.
Yes Bank will continue to focus on corporate customers while expanding its retail base, the management told shareholders. However, it will not go for an aggressive branch expansion strategy, and will rely on the digital channel.
The subject of two independent directors, Ajai Kumar and Mukesh Sabharwal, stepping down from the bank’s board is believed to have not come up at the AGM.
Ravneet Gill took charge as Yes Bank’s managing director and CEO earlier this year after the RBI denied Kapoor a fresh term at the helm.
In its report on Tuesday, Moody’s cited ongoing liquidity pressures on Indian finance companies and real estate firms that will negatively impact the credit profile of Yes Bank, given its sizeable exposure to weaker companies in these sectors.
“The negative adjustment takes into account management’s aggressive strategy, which has translated into rapid loan growth in the past four-five years and large concentrations to some of the Indian conglomerate groups. The adjustment also takes into account the RBI’s identification of several lapses and regulatory breaches in the various areas of the bank’s functioning,” the report stated.